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Which? 


(The  Case  of  Costa  Rica) 


LINCOLN    G:'  -  VALENTINE 


iX-^.vu:*^^.^if'I^L'i'&-l)^''^rA<iii^j:.ff%<rfi'^ 


THE  CASE  OF 
COSTA  RICA 


LINCOLN     G.    VALENTINE 


3  3^^^ 


INDEX. 


WHICH? 

(The  Case  of  Costa  Rica.) 

Page. 
Is  this  continent  ripe  for  a  policy  of  pure  idealism  ? 7 

Europe  versus  America  in  competing  for  strategic  oil  grant. 

Monroe  Doctrine  held  to  be  inapplicable  by  Gonzalez    Government  of  Costa 

Rica  and  European  nations 11 

How  the  Kaiser  succeeded  in  bossing  Costa  Rica 15 

President   Gonzalez*   scrap   of   paper   theory    23. 

Alfredo  Gonzalez,  ousted,  enlists  President  Wilson's  aid. 

How  Gonzalez  touched  our  President's  sentimental  chord  and  obtained  his 

support 6i 

Gonzalez'  attempts  to  influence  American  Senate  and  public. 

His  publicity  campaign  against  United   States  interests.     Their  safes   rifled 

"with  the  aid  of  United  States  Government  officials?" 79 

President  Tinoco's  testimony. 

Costa  Rican  Congress  unanimously  rejects  Gonzalez'  charges  as  baseless  and 

untrue 93 

The  American  Senate  and  the  case  of  Costa  Rica 97 

Conclusion. 

A  more  practical  Latin  American  policy  is  needed,  protecting  our  citizens  and, 

at  the  same  time,  aiding  our  continental  neighbors  103 

Appendix  1.     Address  of  Representative  Norman  J.  Gould  in  the  House  of  Repre- 
sentatives         105 

Appendix  2.     From  the  testimony  of  the  Assistant  Editor  of  "El  Imparcial " 109 


August,  1919. 


PREFACE : 


The  writer  of  this  booklet  has  no  personal  interest  in  Costa  Rican 
affairs  and  does  not  champion  anybody's  cause.  No  profit,  direct  or  in- 
direct, will  accrue  to  him  from  the  establishment  of  one  regime  or  another. 
He  seeks  no  concession  or  privilege  in  that  little  country. 

This  expose  is  published,  not  as  his  defence  against  charges  that  are 
baseless  on  their  face;  not  as  an  incrimination  of  the  aliens  and  Ameri- 
cans pictured  therein,  who,  after  all,  were  merely  striving  to  attain  their 
own  ends  in  their  own  way;  but  as  an  object  lesson  to  illustrate  what 
seems  to  be  one  of  the  many  serious  rnistakes  in  our  Latin  American  policies 
of  recent  years.  He  deems  himself  prepared  to  write  on  the  subject 
because  of  his  long  and  intimate  acquaintance  with  facts  and  persons.  No- 
body appears  to  have  taken  the  initiative  in  presenting  this  melodramatic 
tangle  before  the  public.  Someone  should.  The  harm  has  unfortunately 
been  done,  but  perhaps  it  is  still  time  to  reflect  and  remedy. 

LINCOLN  G.  VALENTINE. 

2200  Q  St.,  Washington. 


IS  THIS  CONTINENT  RIPE  FOR  A  POLICY  OF  PURE  IDEALISM? 

Some  of  our  great  statesmen  have  devoted  long  and  conscientious 
thought  to  Pan-American  problems  and  now  view  with  much  concern  our 
fatal  mistakes  of  recent  years.  Their  conclusions  and  policies  may  perhaps 
be  condensed  into  the  following  cardinal  principles : 

Attract  Latin  Americans  toward  us — 

Sentimentally:  by  abstaining  from  meddling  with  their  internal 
affairs  unless  provoked;  letting  each  country  evolve  its  own  destiny 
in  its  own  way;  avoiding  the  feeling  that  we  desire  to  "force"  them, 
but  instilling  the  impression  that  we  are  willing  to  co-operate. 

Politically:  by  preventing  as  far  as  possible  European  and 
Asiatic  strongholds  in  Latin  America ;  taking  steps  to  retain  all 
important  strategic  rights  on  this  continent  in  American  hands  and 
granting  the  full  protection  of  the  Stars  and  Stripes  to  our  citizens 
wherever  they  may  be. 

Financially  and  commercially:  by  giving  our  sisters  to  the  south 
large  borrowing  facilities  in  the  United  States  and  meeting  their 
commercial  needs  on  the  same  basis  as  European  and  Asiatic  compe- 
titors. 

These  principles,  wisely  applied  by  Secretaries  of  State  Root  and  Knox, 
did  more  to  create  closer  Pan-American  relations  than  anything  prior  to 
1912.  This  is  best  illustrated  in  the  case  of  Central  America  which  had  been 
the  hotbed  of  revolutions  prior  to  1907  when,  through  the  intelligent  col- 
laboration of  our  Secretary  of  State  Root  and  the  Mexican  Secretary  of 
State  Creel,  the  Central  American  Peace  Court  was  established,  which  for 
years  prevented  wars  and  revolutions  in  Central  America. 

President  Wilson,  however,  had  different  ideas.  He  appeared  to  be 
of  the  opinion  that  elevated  idealism  and  international  altruism  -alone,  ex- 
pressed with  touching  rhetoric,  would  rapidly  reach  the  hearts  of  Latin 
Americans  and  establish  ties  of  feeling  stronger  than  ties  of  common  inter- 
est. The  purpose  of  this  booklet  is  not  to  go  into  a  long  dissertation  on 
the  Wilson  doctrine  and  its  effects.  We  have  heard  much  complaint  in 
recent  years  on  the  part  of  thinking  Americans,  far-seeing  enough  to  com- 
prehend the  danger  of  this  new  policy.  In  Mexico,  Americans  have  been 
killed  by  the  score  and  hundreds  of  millions  of  American  dollars  invested 
have  become  endangered.  Unrest  has  broken  out  anew  in  Central  America 
and  the  Central  American  Peace  Court  (the  first  real  experiment  in  a  League 
of  Nations),  has  been  permitted  to  go  out  of  existence.    It  has  been  charged 


that  the  nefarious  influence  of  the  Hun  was  responsible  for  this  ungratifying 
result.  No  doubt  it  was.  But  it  is  reasonably  certain  that  this  same  influence 
would  have  been  reduced  to  almost  nothing,  prior  to  1914,  had  the  Latin 
American  policy  of  preceding  administrations  prevailed. 

Nothing  illustrates  this  so  well  as  the  case  about  to  be  related.  The 
expose  will  be  limited  to  a  compilation  of  established  facts  and  original 
documents,  which  reveal  the  curious  psychology  of  some  of  our  little  neigh- 
bors; the  feeling  on  their  part  towards  the  United  States  on  the  one  hand, 
and  Germany  and  Great  Britain  on  the  other.  It  is  a  graphic  illustration 
of  the  intricate  problems  confronting,  under  the  Wilson  policy,  Ameri- 
can capitalists  desirous  of  developing  large  financial  and  industrial  propo- 
sitions in  the  smaller  countries  south  of  us. 

When  a  European  of  standing,  whether  English,  French  or  German, 
ventures  out  of  his  country  on  legitimate  commercial,  financial  or  industrial 
pursuit,  his  government  is  behmd  him.  Upon  arriving  at  a  Latin  American 
capital,  he  is  courteously  attended  to  by  his  Embassy  or  Legation  and,  in 
dealing  with  the  local  Government,  enjoys  the  official  introductions  and 
direct  assistance  of  his  country's  Envoy.  If  in  the  course  of  the  negotiations, 
or  as  an  outcome  thereof,  the  contracting  Government  tries  to  drive  an  unfair 
bargain,  unduly  interferes  with  the  execution  of  the  covenant  or  otherwise 
improperly  obstructs  the  deal,  the  Embassy  or  Legation  as  a  rule  uses  its 
good  offices  in  his  behalf.     European  Powers  realize  two  things: 

1.     Exceptional  financial  risks  are  attached  to  investments   in 
foreign  states,  especially  in  the  smaller  Latin  American  republics. 
!  These  risks  can  only  be  offset  by  securing  additional  advantages ; 

otherwise  there  would  be  no  inducement  for  foreign  investors  to  ven- 
ture out  of  their  own  country. 

[  2.     The  more  ample  the  scope  and  drastic  the  terms  obtained, 

the   greater   the  commercial  and  political  benefit   accruing  to   the 
investor's  country. 

This  does  not,  of  course,  mean  extortion  or  usury,  but  the  securing 
of  terms  commensurate  with  the  risks  attached  to  the  venture  and  the  size 
of  the  investment. 

Here  again  President  Wilson  seems  to  hold  a  different  view  on  the 
subject.  His  speeches  and  actions  appear  to  reveal  a  firm  conviction 
that  a  large  measure  of  altruism  should  predominate  among  American  capi- 
talists venturing  outside  of  the  United  States.  They  should  abstain  from 
seeking  special  privileges  in  foreign  lands  and  be  content  with  securing 
such  terms  as  are  current  in  our  country  for  similar  enterprises.  The  in- 
creased riks  should  not  be  compensated  by  more  favorable  conditions  and 
guarantees,  but  rather  by  creating  idealistic  ties  of  sentimental  understand- 
ing which  he  takes  to  be  stronger  than  ties  of  material  interest. 


This  interpretation  of  his  ideas  is  especially  justified  by  his  attitude 

in  Mexican  and  Central  American  affairs.     It  is  also  clearly  set  forth  in 

his  Mobile  speech  of  October  26,  1913,  wherein  he  said  among  other  things : 

"  The  future,  ladies  and  gentlemen,  is  going  to  be  very  different 

in  this  hemisphere  from  the  past.     These  States,  lying  to  the  south 

of  us,  which  have  always  been  our  neighbors,  will  now  be  drawn 

closer  to  us  by  innumerable  ties  and  I  hope,  chief  of  all,  by  the  tie 

of    common    understanding   of    each   other.     Interest    does   not   tie 

nations  together.     It  sometimes  separates  them     *     *     * " 

"  There  is  one  peculiarity  about  the  history  of  the  Latin  Ameri- 
can states  which  I  am  sure  they  are  keenly  aware  of.  You  hear 
of  '  concession '  to  foreign  capitalists  in  Latin  America.  You  do  not 
hear  of  concession  to  foreign  capitalists  in  the  United  States.  They 
are  not  granted  concessions.  They  are  invited  to  make  investments. 
The  work  is  ours,  though  they  are  welcome  to  invest  in  it.  We  do 
not  ask  them  to  supply  the  capital  and  do  the  work.  It  is  an  invita- 
tion, not  a  privilege;  and  states  that  are  obliged,  because  their  terri- 
tory does  not  lie  within  the  main  field  of  modern  enterprise  and 
action,  to  grant  concessions,  are  in  this  condition,  that  foreign  inter- 
ests are  apt  to  dominate  their  domestic  affairs ;  a  condition  of  affairs 
always  dangerous  and  apt  to  become  intolerable.  What  these  states 
are  going  to  see,  therefore,  is  an  emancipation  from  the  subordi- 
nation which  has  been  inevitable,  to  foreign  enterprise  and  an  asser- 
tion of  the  splendid  character  which,  in  spite  of  these  difficulties, 
they  have,  again  and  again,  been  able  to  demonstrate. 

"  The  dignity,  the  courage,  the  self-possession,  the  self-respect 
of  the  Latin  American  States,  their  achievements  in  the  face  of  all 
these  adverse  circumstances,  deserve  nothing  but  the  admiration  and 
applause  of  the  world.  They  have  had  harder  bargains  driven  with 
them  in  the  matter  of  loans  than  any  other  peoples  in  the  world. 
Interest  has  been  exacted  of  them  that  was  not  exacted  of  anybody 
else,  because  the  risk  was  said  to  be  greater;  and  then  securities 
were  taken  that  destroyed  the  risk,  an  admirable  arrangement  for 
those  who  were  forcing  the  terms.  I  rejoice  in  nothing  so  much 
as  in  the  prospect  that  they  will  now  be  emancipated  from  these  con- 
ditions, and  we  ought  to  be  the  first  to  take  part  in  assisting  in 
that  emancipation." 

The  President's  cis-Atlantic  policy,  since  expressed  and  applied  on 
many  occasions,  may  therefore  be  summarized  in  the  following  principles, 
based  upon  his  speeches  and  attitude  in  most  Latin  American  matters : 

1.  Abandon  the  Root  and  Knox  policies. 

2.  Withdraw  the  protection  of   the   Stars  and   Stripes   from 


.  »►•.# 


10 

every  United  States  citizen  who  establishes  enterprises  in  Latin 
America  upon  terms  and  conditions  markedly  more  liberal  than  those 
prevailing  in  the  United  States. 

*3.  Oppose  nothing  but  perfunctory  resistance  to  Latin  Amer- 
ican governments  obstructing  the  development  of  such  American  con- 
cessions as  contain  privileges  notably  greater  than  those  customary  in 
the  United  States,  regardless  of  the  '*  material  interests  "  involved. 

This  policy  relegates  to  the  class  of  "  concession  hunters,"  unworthy  of 
strong  government  support,  our  largest  enterprises  in  Latin  America,  such 
as:  petroleum  companies  in  Mexico  operating  under  special  concessions; 
certain  fruit  and  steamship  companies ;  banks  having  dealings  with  Spanish 
American  governments  under  specific,  apparently  liberal,  grants,  etc.  Roose- 
velt, under  this  classification,  might  have  been  called  the  greatest  "  con- 
cession hunter "  because  he  secured  the  most  liberal  terms  of  all,  viz. : 
the  Panama  Canal,  which  placed  into  our  hands  the  fate  of  the  Panama 
Republic.  And — lest  we  forget — President  Wilson  has  himself  qualified 
as  a  "  concession  hunter  "  because  the  grant  he  obtained  from  Nicaragua 
for  the  construction  of  an  inter-oceanic  canal  through  that  country  com- 
prises terms  almost  as  broad  and  exclusive  as  those  embodied  in  the  Panama 
treaty. 

The  facts  now  to  be  made  public  for  the  first  time,  though  seemingly 
extraordinary,  are  quite  likely  to  be  similar  to  others  that  have  never  be- 
come known.  They  are  of  educational  value  to  anyone  interested  in  our 
financial,  industrial  and  commercial  expansion  on  this  continent.  Whilst 
this  expose  pictures  a  rather  distressing  condition  of  aflfairs,  it  is  not  written 
for  the  purpose  of  discouraging  Americans  from  venturing  into  the  southern 
countries.  Quite  the  reverse,  its  object  is  to  encourage,  by  the  frank  pres- 
entation of  a  case  in  point,  the  formation  of  a  Latin  American  policy,  prac- 
tical, constructive  and  acceptable  in  spirit  by  our  continental  neighbors, 
without  the  confusing  cloak  of  an  idealism,  highly  admirable,^  but  inapplicable 
in  this  era  of  cold  and  competitive  progress. 


♦  •» 


11 


EUROPE  VERSUS  AMERICA  IN  COMPETING  FOR  STRATEGIC 

OIL  GRANT. 

Monroe  Doctrine  Held  to  be  Inapplicable  by  Gonzalez  Government 
OF  Costa  Rica  and  European  Nations. 

The  problem  play  before  us  took  place  in  the  Republic  of  Costa  Rica, 
Central  America,  and  the  account  begins  in  the  year  1912.  Petroleum,  the 
liquid  gold  coveted  by  every  nation  and  which  has  so  much  to  do  with  our 
troubles  in  Mexico,  is  at  the  bottom  of  it. 

A  look  at  the  map  shows  the  strategic  importance  of  oil  fields  in 
Costa  Rica.  It  will  be  seen  that  this  little  state  lies  between  the  Panama 
Canal  domain  and  the  proposed  Nicaragua  inter-oceanic  waterway.  Petro- 
leum rapidly  taking  the  place  of  coal  as  fuel,  the  product  of  those  fields, 
within  pumping  distance  of  the  two  canals,  is  therefore  of  the  utmost 
strategical  importance.  It  may  safely  be  said  that  the  nation  possessing  the 
oil  output  of  Costa  Rica  and  Panama  will,  when  large  production  is  secured, 
control  the  shipping  situation  in  Latin  America.  Another  feature  should 
be  noted  as  interesting: 

A  vast  oil  supply  base  on  the  narrow  accessible  strip  of  Central 
America  will  go  far  towards  offsetting  the  dominating  international  value 
of  the  Mexican  oil  fields,  which  Carranza  is  trying  so  hard  to  wrest  from 
the  hands  of  the  United  States  and  Great  Britain. 

With  the  foregoing  facts  pointed  out,  the  reader  will  not  be  surprised 
to  learn  that  European  nations,  particularly  Great  Britain  and  Germany, 
have  made  every  effort  to  obtain  the  control  of  the  Costa  Rican  petroleum 
deposits.  The  question  arises:  Could  they,  under  the  Monroe  Doctrine, 
be  permitted  to  acquire  them  ?  Our  story  revolves  around  that  issue.  Most 
of  the  Latin  American  nations  deny  that  the  Monroe  Doctrine  gives  the 
United  States  the  right  to  prevent  them  from  granting  whatever  they 
choose  to  European  or  Asiatic  states.  Our  government,  however,  has 
always  held  that,  under  the  Monroe  Doctrine,  none  but  American  countries 
are  entitled  to  the  control  of  strategic  rights  in  this  hemisphere. 

European  attempts  to  secure  the  Costa  Rican  oil  base  are  related  in 
the  following  letter  from  the  writer  to  the  Hon.  Stewart  Johnson,  American 
Charge  d'Afifaires  in  Costa  Rica: 

"....(b)     Control   of  Fuel  Resources. 

"Six  or  seven  years  ago,  the  First  Lord  of  the  Admiralty  as- 
serted in  a  speech  that  '  the  control  of  the  fuel  resources  in  the 
countries  around  the  Caribbean  Sea  means  the  control  of  the  Carib- 


12 

bean  Sea,'  or  words  to  that  effect.  He  further  stated  that,  there- 
fore, it  was  to  the  interest  of  the  British  Government  to  gain  the 
greatest  control  possible  of  oil  and  coal  lands  in  Mexico,  Central 
America,  and  the  northern  countries  of  South  America,  especially  in 
sections  from  which  oil  could  be  pumped  to  the  Panama  Canal. 

"  British  Attempts  to  Secure  Caribbean  Oil  Control. 

"As  is  generally  known,  the  firm  of  S.  Pearson  &  Son  has  the 
direct  backing  and,  in  fact,  collaborates  with  the  British  Admiralty. 

"  For  the  purpose  of  carrying  out  the  plans  above  outlined, 
Lord  Murray,  a  partner  of  S.  Pearson  &  Son,  of  London,  visited 
Colombia,  Panama  and  Costa  Rica,  in  1913,  in  order  to  secure  con- 
cessions covering  the  control  of  the  oil  resources  south  and  north 
of  the  Panama  Canal  for  his  firm. 

"(a)   Colombia. 

"  Preparatory  to  their  endeavors,  S.  Pearson  and  Son  estab- 
lished close  relations  with  Mr.  Saturnino  Restrepo,  a  member  of 
one  of  the  most  influential  families  of  Colombia  and  who,  I  believe, 
at  that  time  represented  Colombia  in  England  in  a  diplomatic  or  con- 
sular capacity. 

"  Owing  to  the  influence  of  Mr.  Restrepo,  Lord  Murray  was 
placed  in  touch  with  some  of  the  leading  elements  of  Colombia. 

"  Through  friends  of  Mr.  Restrepo's  I  have  since  been  informed 
that  S.  Pearson  and  Son  were  advised  not  to  attempt  to  secure  con- 
cessions in  Colombia  for  any  large  foreign  firm  directly,  in  view  of 
the  strong  anti-foreign  sentiments  which  for  years  have  reigned 
in  Colombia.  It  was  considered  more  feasible  to  have  some  influ- 
ential Colombian  without  any  ostensible  connection  with  large  British 
interests,  such  as  Mr.  Restrepo  himself  obtain  the  concession. 

**  S.  Pearson  and  Son,  however,  in  the  belief  that  the  prestige  of 
its  name  and  that  of  its  representative.  Lord  Murray,  would  open  the 
door  of  Colombian  good-will,  disagreed  with  Mr.  Restrepo. 

"  That  I  understand,  was  one  of  the  main  reasons  why  Lord 
Murray  was  entirely  unsuccessful  in  Colombia. 

"(b)  Panama. 

"  Lord  Murray  was  equally  unsuccessful  in  Panama  because, 
I  understand,  the  United  States  Government,  for  strategic  and 
political  reasons,  did  not  look  with  favor  upon  British  control  of  the 
oil  resources  of  that  country. 

"(c)  Costa  Rica. 

"  S.  Pearson  and  Son  established  its  relations  with  the  Gov- 
ernment of  Costa  Rica  through  Mr.  Wencislao  de  la  Guardia,  at 


13 

that  time  Costa  Rican  Minister  to  Great  Britain,  resident  in  London. 

"  Mr.  Restrepo  had  accompanied  Lord  Murray  to  Colombia. 
In  a  like  manner,  Mr.  de  la  Guardia  proceeded  to  Costa  Rica,  to 
back  the  endeavors  of  the  Pearson  concern. 

''  It  is  worthy  of  note  that  Mr.  Wencislao  de  la  Guardia  is  a 
brother-in-law  of  Mr.  Federico  Tinoco,  having  married  the  latter's 
sister. 

"  On  September  27,  1913,  the  Costa  Rican  Government  signed 
a  contract  with  S.  Pearson  and  Son,  granting  to  the  said  firm  the 
control  of  all  petroleum  resources  in  Costa  Rica  for  sixty  years, 
renewable  for  another  sixty  years  at  the  contractor's  option. 

"  The  contract  was  submitted  to  the  Costa  Rican  Congress  on 
November  4,  1913,  and  referred  to  a  Committee  of  Public  Works, 
of  which  Mr.  Alfredo  Gonzalez,  later  President  of  Costa  Rica,  then 
a  Congressman,  was  a  member. 

"  The  said  Committee  highly  recommended  the  approval  of  the 
Pearson  concession  and,  accordingly,  Congress  accepted  it  on  first  and 
second  readings. 

"  When  the  contract  came  up  for  third  reading,  the  United 
States  Government  had  taken  an  interest  in  the  matter  and  advised 
the  Costa  Rican  Government  that  it  would  not  look  with  favor  upon 
the  granting  of  this  contract  to  British  interests. 

"  Accordingly,  Congress  convened  in  secret  session  and,  in  the 
third  reading,  rejected  the  Pearson  concession. 

"  For  further  details  in  the  matter  and  a  statement  of  policy  on 
the  part  of  Secretary  Knox  in  a  letter  addressed  to  Dr.  Luis  Ander- 
son, you  may  refer  to  the  latter. 

"  Second  Attempt  of  Pearson  Interests  in  Costa  Rica. 

"  Prior  to  the  proposed  Pearson  contract,  denouncements  of  oil 
zones  in  Costa  Rica  were  open  to  all  private  parties,  in  the  same 
manner  as  ordinary  mining  claims  in  our  country.  Upon  the  request 
of  the  Pearson  interests,  the  Government  thereupon  proceeded  to 
enact  a  law  nationalizing  the  petroleum  resources  of  the  country  and 
prohibiting  all  denouncements. 

"  At  that  time,  close  to  a  million  acres  had  been  denounced  by 
various  private  parties,  covering  the  most  probable  oil  zones  of  the 
country. 

"  The  Pearson  interests  then  considered  the  acquisition  of  all 
these  claims.  However,  they  were  in  the  hands  of  about  three 
hundred  individuals,  and  no  unity  existeed  between  them. 

"  The  interest  awakened  by  the  Pearsons  in  the  oil  of  Costa  Rica 
acted  as  an  incentive  for  Mr.  Diego  Povedano  (a  prominent  mine 
operator)  to  unite  these  three  hundred  denouncers,  and  the  result 


Vi- 


14 

was  the  formation  of  the  National  Petroleum  Company  (Compaiiia 
Nacional    de    Petroleo),    to    which    most    of    the    oil    claims    were 

transferred. 

**  Various  parties  began  at  once  to  plan  the  acquisition  of  that 
company's   holdings.      The    most    instrumental    among   them    were 
Alfonso  Ahschul,  a  German,  now  on  the  blacklist,  and  an  agent  of 
the  Krupp  works  in  Central  America,  and  Dr.  Manuel  Dieguez,  a 
Guatemalan  attorney,  residing  in  Costa  Rica,  of  very  pronounced  and 
open  pro-German  tendencies    *     *     *." 
This  letter  (of  June  14,  1918)  was  written  on  the  occasion  of  a  more 
recent  European  attempt  to  secure  oil  lands  adjacent  to  the  proposed  Nica- 
ragua Canal,  and  the  Legation  so  informed  the  State  Department,  as  shown 
in  the  following  reply  from  our  envoy  (of  June  15,  1918)  : 

"  I  wish  to  acknowledge  receipt  of  your  interesting  compilation 
of  data  on  oil  matters  in  Central  America  and  Colombia  in  connection 
with  the  pending  Amory  concession  and  to  inform  you  that  I  have 
sent  copies  of  the  letter  to  the  Department  of  State  for  its  infor- 
mation." 

Had  the  United  States  Government  not  acted  in  the  nick  of  time,  to 
prevent  the  legislative  approval  of  the  British  petroleum  monopoly  in  Costa 
Rica  in  1913,  this  booklet  could  never  have  been  written. 

After  the  rejection  of  the  English  grant,  the  Costa  Rican  Congress  pro- 
ceeded to  nationalize  the  petroleum  of  the  country,  but  as,  under  the  consti- 
tution, no  law  can  be  retroactive,  the  decree  had  to  exempt  such  oil  areas  as 
had  been  previously  acquired  by  private  parties.  These  were  left  valid  and 
exploitable  under  the  laws  then  in  force,  and  it  so  happened  that  they  covered 
practically  all  of  the  probable  deposits  in  the  country.  Consequently,  who- 
ever should  have  acquired  the  private  rights  would  have  been  in  practical 
control  of  the  petroleum  situation.  This  explains  the  subsequent  British, 
German  and  American  attempts  to  acquire  the  oil  denouncements  or  claims. 

A  bona-fide  all- American  group,  composed  of  Leo  J.  Greulich  and 
Frank  S.  Stelling  (Oklahoma  oil  men),  Herbert  Noble  (a  New  York  attor- 
ney), Washington  S.  Valentine  (also  of  that  city,  who  had  been  prominent 
for  over  thirty  years  in  Central  American  railroad  and  mining  matters),  and 
the  writer  leased  them  in  1915.  It  was  soon  apparent  that  the  Costa  Rican 
vl^overnment,  under  the  presidency  of  Alfredo  Gonzalez,  in  favor  of  Euro- 
pean interests,  was  opposed  to  American  initiative,  and  the  resulting 
complications  hereinafter  related  can  only  be  ascribed  to  his  anti- Ameri- 
canism. For  a  full  understanding  of  the  situation,  it  is  necessary  to  acquaint 
the  reader  with  the  political  status  in  Costa  Rica  between  1913 — when 
Alfredo  Gonzalez,  as  a  member  of  Congress,  championed  the  European  oil 
monopoly— and  March,  1915,  when  the  American  group  appeared  on  the 
scene  in  control  of  the  private  petroleum  zones. 


15 


HOW  THE  KAISER  SUCCEEDED  IN  BOSSING  COSTA  RICA. 

In  the  fall  of  1913,  the  three  traditional  political  parties  in  Costa  Rica 
were  striving  to  elect  their  candidates  for  the  1914-1918  presidential 
period.  The  Civilistas  had  nominated  former  President  Rafael  Yglesias; 
the  Duranistas,  Dr.  Carlos  Duran,  a  prominent  physician ;  and  the  Fernan- 
distas,  Maximo  Fernandez,  the  "  Bryan  of  Costa  Rica,"  who  had  run  various 
times. 

The  election  failed,  as  none  of  the  candidates  secured  the  minimum 
number  of  votes  required  by  the  constitution.  It  was  therefore  incumbent 
upon  Congress  to  designate  a  President  from  among  these  candidates. 

Federico  Tinoco,  until  recently  President  of  Costa  Rica,  a  gentleman 
of  good  family,  educated  in  Belgium  and  the  United  States,  possessed 
strong  personal  magnetism  and  the  political  "  know  how."  To  cut  the 
Gordian  knot,  he  persuaded  the  Duranistas  and  Fernandistas  to  combine, 
withdraw  their  candidates,  and  appoint  in  their  stead  a  figurehead  from 
among  the  members  of  Congress,  as  President  under  the  direction  of  a 
coalition  cabinet  jointly  named  by  both  parties. 

The  choice  fell  upon  Alfredo  Gonzalez,  an  inoffensive  and  unpretentious 
country  notary,  about  thirty-five  years  of  age.  Of  good  standing  in  his  pro- 
vincial community,  he  had  been  elected  to  Congress  but  never  taken  a  promi- 
nent part  in  the  debates,  except  when  the  European  oil  monopoly  was  under 
discussion.     Gonzalez  had  been  its  strongest  advocate. 

Don  Alfredo's  disposition  was  easy-going  and  jocular.  His  unimpor- 
tant record  had  not  qualified  him  for  presidential  timber,  and  the  proposition 
to  make  him  Chief  Magistrate  came  to  him  like  a  thunderbolt.  When 
Federico  Tinoco,  early  in  1914,  communicated  the  decision  to  him  in  the 
name  of  the  combined  parties,  Don  Alfredo  thought  it  was  a  huge  joke. 

"  Pull  it  off  on  someone  else,"  he  said,  with  a  hearty  laugh.  "  Whoever 
thought  of  me  as  President?  Why,  hardly  anyone  knows  of  my  existence. 
If,  out  of  a  clear  sky,  you  make  me  President  like  this,  you  had  better  be 
careful  because  I  might  kick  you  all  out  and  become  Kaiser." 

"  We  are  not  afraid  of  that,  Alfredo,"  Tinoco  replied ;  "  the  arrange- 
ment is  that  you  are  to  be  a  sort  of  democratic  Swiss  President.  We  will 
name  your  cabinet,  composed  of  Duranistas  and  Fernandistas.  All  you  have 
to  do  is  to  simply  follow  the  lead  which  they  will  give  you." 

Gonzalez  accepted  and  Tinoco  took  him  to  his  town  house;  but  when 
It  came  down  to  action,  he  "  got  cold  feet  "  and  refused  to  take  the  delegates 
of  the  combined  parties  seriously.  In  fact,  it  was  only  after  a  day's  coaxing 
behind  closed  doors  in  Tinoco's  home  that  the  fortunate  pr  unfortunate  man 
was  induced  to  move  to  the  Costa  Rican  White  House. 


16 


10  CENTIMOS 


Director:  FRANCISCO   SOLER 


■Vumero  44 


''f  *!?.*rr'*^'^N"«r  San  Jose.  Co.ta  Rica.  13  de  Julio  de  1916 

Apartedo  de  Coit««*  N°.  63S  '  ' 


CONDICIONES:  Co>U  Rie*  ( 1-50 
trimc«tre.-7?  At.  E*t«,  N»   42 


Preparatives  para  la  reforma 


PREPARING  FOR  THE  REFORM 
Johann  Kiimpel,  nicknamed  "  Kultur  "  or  "  Rasputin  of  Costa  Rica  "  is  shown  mag- 
nifying President  Gonzalez'  hand,  in  order  to  fit  him  for  his  dictatorial  grasp  over 
the  country.  Kiimpel,  a  Hun  propagandist,  was  Gonzalez'  closest  friend  and  advisor, 
and  in  joint  control  with  him  of  the  Pro-German  daily,  "  El  Imparcial,"  which  they 
had  founded  together. 


17 

The  political  program  had  been  worked  out  and  a  cabinet  named  for 
him.  Pacts,  embodying  this  program,  were  thereupon  drawn  up  and  Gon- 
zalez subscribed  to  them.  Among  other  things,  it  was  stipulated  that 
Gonzalez  should,  under  no  circumstances,  run  for  a  second  term.  It  was 
also  agreed  that  Federico  Tinoco,  in  order  to  guarantee  the  obligations 
assumed  by  him,  should  remain  as  Minister  of  War  during  Don  Alfredo's 
term  of  office. 

On  May  18,  1914,  the  new  President  assumed  the  reins  of  government. 
That  was  the  time  when  the  Kaiser's  plans  for  the  European  conflagration 
were  about  to  mature,  the  murder  of  the  Austrian  Archduke  occurring  five 
weeks  later.  The  secret  intrigue  machinery  of  the  Hun  was  then  in  full 
swing  throughout  this  hemisphere.  Clever  agents  had  settled  down  every- 
where and  cipher  messages  were  being  rushed  from  the  Berlin  Foreign 
Office  across  the  Atlantic  in  all  directions. 

The  control  of  Costa  Rica  was  of  the  utmost  importance  to  Germany, 
as  aerial  attacks  could  be  readily  launched  from  the  uninhabitated  southern 
section  of  that  Republic  against  the  Panama  Canal,  a  distance  of  only  about 
150  miles.  The  country  was  also  considered  very  useful  as  a  wireless  relay 
station.  Powerful  machinery  at  Hanover  or  Nauen  transmitted  messages 
directly  to  the  Hun  installation  in  Mexico  City.  Another  German  station 
had  been  established  in  Salvador  and  messages  could  have  been  relayed 
easily  via  Costa  Rica  to  Colombia  and  the  rest  of  South  America. 

The  Hohenzollern  master  mind  in  Costa  Rica  was  a  clever  German,  by 
the  name  of  Johann  Kiimpel,  who  appears  to  have  been  for  years,  and  to 
be  now,  the  head  of  the  Hun  secret  organization  in  that  country.  He  lived 
in  Costa  Rica,  apparently  as  a  peaceful  coffee  planter,  but  the  respect  in- 
variably shown  him  by  the  other  Germans,  his  close  and  constant  relations 
with  Herr  Erythropel,  in  charge  of  the  Kaiser's  Legation,  and  the  hap- 
penings now  to  be  pictured,  show  that  his  mission  was  political  rather 
than  commercial.  When,  a  few  months  before  the  European  War,  smiling 
Destiny  had  lifted  Gonzalez  into  the  Presidency,  nobody  in  Costa  Rica 
gave  more  than  passing  thought  to  the  Central  American  plans  of  the  Pan- 
Germans.  Little  attention  had,  therefore,  been  paid  to  the  fact  that  Alfredo 
Gonzalez  and  Johann  Kiimpel  were  chums  of  long  standing  and  neighbors 
in  Don  Alfredo's  provincial  home  town.  Had  this  fact  been  given  weight  at 
the  time,  and  a  true  pro- Ally  placed  in  the  Presidency,  it  is  quite  possible 
that,  through  the  timely  curbing  of  German  intrigues  in  Costa  Rica,  much 
of  the  shipping  disaster  on  this  side  of  the  Atlantic  could  have  been  avoided. 

Kiimpel  has  since  been  nicknamed  the  "  Rasputin  of  Costa  Rica."  It  is 
no  exaggeration  to  qualify  him  in  this  way  because  he  soon  succeeded  in 
wielding  over  Gonzalez  and  the  Costa  Rican  Government  the  same  nefarious 
power  that  Rasputin  had  over  the  Czar.  Almost  immediately  after  the  new 
Chief    had    established   himself    in   the    Presidential    Mansion,    it   became 


18 


LA  LINTERNA. 

Procedimientos  rapidos 


"  RAPID  PROCEEDINGS." 
:    '  From  "  La  Linterna,"  December  9,  1916. 

Gonzalez,  in  the  uniform  of  a  Prussian  officer,  orders  the  deportation  to  distant 
fever  infected  regions  of  the  editors  who  had  launched  a  campaign  against  the  Presi- 
dent and  his  German  coterie.  In  the  background  the  program  of  the  Republican 
Party  is  shown,  torn  to  pieces,  Gonzalez,  upon  being  placed  in  the  presidency  with 
the  aid  of  this  party,  qualified  the  pledges  subscribed  by  him  as  "  scraps  of  paper," 
when  the  Huns  were  advancing  towards  Brussels. 

rn  hobo'iOO'.p.  ■: 
?;rrorriM on  "•;'  ;  .  .^^j  ... 
7/on  orM  vy]\n  vl-t.s'--   . 


apparent  that  Kiimpel  had  Gonzalez  under  absolute  control,  not  only  in 
economic  but  in  political  and  international  issues  as  well.  As  a  matter  of 
fact,  the  "  Rasputin  "  was  included  in  the  national  pay-roll  as  special  advisor 
in  economic  matters ;  and  Fetters,  a  German  friend  of  Kiimpel's,  was  placed 
in  charge  of  public  works.    Hence  the  Kaiser  had  Costa  Rica  well  in  his  grip. 

Gonzalez  did  not  abide  long  by  the  pacts  bearing,  his  signature.  He 
soon  broke  with  the  Duranistas,  in  whose  ranks  figure  the  intellectuals, 
and  severed  his  relations  with  the  Fernandistas,  composed  mostly  of  the 
working  class.  One  of  the  Duranistas,  however,  remained  in  the  Cabinet 
and  has  since  been  considered  by  his  party  as  a  political  outcast.  Federico 
Tinoco,  the  Minister  of  War,  wished  to  resign  as  well,  but  the  combined 
political  factions  agreed  that  he  should  swallow  the  bitter  pill  and  remain, 
so  that  the  country  might  retain  at  least  a  semblance  of  control  in  the  shape 
of  a  physical  grip  over  the  pro-German  Government. 

After  having  thus  relegated  his  political  pacts  to  the  scrap  heap,  elimi- 
nated from  Government  affairs  the  parties  who  had  lifted  him  into  the 
Presidency,  Don  Alfredo  sat  down  with  his  German  advisors  and  planned 
the  best  way  to  serve  the  Vaterland. 

The  first  step  in  this  direction  was  the  purchase  of  modern  linotypes  and 
the  formation  of  a  financial  combination  between  Kiimpel  and  Gonzalez, 
who  drew  on  the  public  treasury  far  the  necessary  funds.  A  daily  news- 
paper was  founded,  called  "  El  Imparcial,"  published  in  Spanish,  with  an 
English  section,  for  Hun  propaganda  and  as  a  semi-official  Government 
organ.    The  editorial  policy  was  as  follows : 

1.  Clever  articles  written  or  inspired  by  President  Gonzalez, 
Kiimpel  and  other  German  and  pro-German  writers  against  foreign, 
primarily  American,  capital  and  enterprises. 

2.  Promotion  of  Hun  industries,  organizations  and  aims. 

3.  Prominent  publication  of  Teuton  successes  and  belittling  of 
Allied  victories. 

-4.     Propaganda  for  Gonzalez'  own  administrative  projects. 
5.     Defense  of  Government  actions. 

The  other  daily  newspaper,  "  La  Informacion,"  with  its  evening  edition, 
"  La  Prensa  Libre,"  was  partly  owned  and  managed  by  a  Frenchman,  and 
naturally  pro- Ally  in  tendency.  Whilst  Gonzalez  dared  not  suppress  it 
entirely,  he  hampered  its  circulation  to  such  a  degree  that  it  would  have 
perished  if  friends  had  not  paid  the  resulting  deficit.  Another  newspaper, 
opposed  to  the  Gonzalez-Kiimpel  regime,  called  ^  ^  La  Republica "  arid 
managed  by  men  of  high  professional  and  political  standing,  was  stopped  by 
force.  Later,  a  comic  paper,  ridiculing  the  Gonzalez-Kiimpel  combine,  was 
established,  called  "  La  Linterna."  It  managed  to  exist  despite  the  Admin- 
istration's constant  obstructions,  but  finally  Gonzalez  had  the  editors  arrested 
and  exiled  to  the  fever-infested  wilds  of  Golfo  Duke.    They  were  only  per- 


20 


a\ 


nj   O   <u   C 


<     rt   O    ^ 


^ 


<y  .^  ^ 


<^2£t 


o  C  o  t 


2 
o 

1 

) 


i<t«5j;i    i^iim  ti^i^H^iJ^     il^.y    iillf     im^llh?^!  5!!?^     mm^  t'-^^-t    5j|j| 


t-i     O   S   §   »; 
rt  u.  c  t-' 


;"> 


21 

mitted  to  return  to  the  capital  after  the  Supreme  Court  had  granted  a  writ  of 
habeas  corpus. 

With  the  approaching  Armageddon  in  Europe,  Germany  felt  the  urgent 
need  of  wireless  control  over  Costa  Rica,  and,  early  in  July,  1914,  a  German 
Reserve  Officer  by  the  name  of  Michel  Schonwitz,  representing  the  "  Gesell- 
schaft  fiir  Drahtlose  Telegraphic  "  of  Berlin,  commonly  called  the  "  Tele- 
funken,"  arrived  at  the  Capital:  Kiimpel  took  him  directly  to  the  Blue 
Castle  (Costa  Rican  White  House). 

Events  were  precipitating  themselves  in  Europe.  No  time  could  be  lost, 
and,  on  July  29,  1914,  a  contract  was  signed,  whereby  the  Telefunken 
(evidently  operating  under  instructions  from  the  Berhn  Foreign  Office) 
secured  from  President  Gonzalez  the  following  concessions : 

1.  Twenty-five  years'  wireless  monopoly,  renewable  for  an  equal 
period. 

2.  The  right  to  establish  anywhere  in  Costa  Rica  wireless  sta- 
tions as  powerful  as  any  on  the  American  continent. 

3.  Free  land  for  that  purpose. 

4.  "  The  Government  shall  grant  within  the  amplest  sphere  of 
its  power  protection  to  the  enterprise     *     *     *." 

This  concession  was  signed  by  Gonzalez,  as  President,  and  Alberto 
Echandi,  as  Minister  of  Public  Works.  Echandi  was  the  partner  of  a 
German  in  Costa  Rica  who  was  later  placed  on  the  black-list. 

But,  to  be  binding,  this  concession  required  legislative  approval,  and 
Congress  was  not  in  session.    Time  was  of  the  essence,  because  the  German 
troops   were   steadily   advancing   towards   Brussels.       Gonzalez,   therefore, 
published  in  "  Official  Gazette  "  No.  39,  of  August  14,  1914,  a  decree  con- 
vening Congress  into  special  session  for  the  express  purpose  of  approving 
this  grant.     In  his  message  to  Congress,  appearing  with  the  concession  in 
the  above-mentioned  number  of  the  **  Official  Gazette,"  the  Executive  said: 
"  *     *     *     and  hence  the  manifest  interest  of   the   Executive 
Power  to  resolve  this  matter  which  is  of  such  transcendental  import- 
ance to  the  country     *     *     *." 

This  was  too  much  for  the  United  States  Government,  and  the  approval 
of  the  concession  was  prevented.  The  Pan-German  statesmen  were  wise 
enough  to  realize  that  the  time  was  not  yet  ripe  to  openly  defy  the  United 
States. 

The  writer's  report  to  Captain  Harry  A.  Strauss,  American  Intelligence 
Officer  at  Panama,  gives  further  information  on  the  aid  rendered  by  the 
Gonzalez-Kiimpel  combine  to  the  Kaiser : 

"  Costa  Rican  Naturalization  of  Germans. 
"During   the   Administration   of    President   Alfredo   Gonzalez, 
.  especially  in  the  year  1916,  several  Germans  received  Costa  Rican 


citizenship  papers,  regardless  of  their  short  stay  in  that  Republic 
(several  weeks  only) .  Such  new  citizens  mostly  left  the  country  soon 
thereafter.  Their  naturalization  was  championed  by  Johann  Kiimpel, 
a  rich  German  propagandist,  for  years  resident  of  Casta  Rica, 
neighbor  in  Heredia  of  President  Gonzalez  and  influential  in  shaping 
Gonzalez'  economic  and  diplomatic  policies. 

''Proofs: 

"  Costa  Rican  Official  Gazette  No.  95,  of  April  27th,  1916,  con- 
taining naturalization  decree  of  one  Max  M.  Weinberg  Schaps. 

"  This  man  arrived  in  Puntarenas  on  April  5th,  1916,  went  to 
San  Jose,  resided  at  the  Hotel  Frangais  until  April  26th,  1916,  left 
for  Puerto  Limon  on  that  day,  tried  to  sail  as  a  Costa  Rican  on  an 
Italian  steamer  but  was  refused. 

"  The  naturalization  decree  says  that  Weinberg  Schaps  was  '  a 
native  of  Germany,  accidentally  living  in  this  town  '  (San  Jose). 

"  Costa  Rican  Official  Gazette  No.  49,  of  February  29th,  1916, 
containing  naturalization  decree  of  one  Louis  Davidson  Rosenberg. 
"  I  have  no  further  data  on  this  case,  but  shall  secure  them. 

"  Church  Propaganda. 
"  A  paper,  now  suppressed  by  President  Tinoco,  called  '  La 
Nueva  Era,'  published  pro-German  utterances.  It  was  owned  by 
elements  close  to  Bishop  Storck,  the  general  impression  being  that 
the  Bishop  himself  was  a  part  owner  thereof.  It  was  managed  by 
Father  Valenciano,  a  Catholic  priest.  The  owners  of  Lehmann's 
book-store  (Sauter  &  Co.)  were  also  interested,  as  was  Emil  Span, 
a  German  chemist  or  naturalist.  All  these  parties  are  close  friends 
of  the  Bishop     *     *     *." 

Many  other  cases  might  be  cited  to  demonstrate  the  pro-German  charac- 
ter of  the  Gonzalez  Government;  such  as,  the  facilities  given  to  German 
Reserve  Officer  Von  Hellsing  to  sound  the  bays  and  rivers  in  strategic 
regions  adjacent  to  the  proposed  Nicaragua  Canal  and  accessible  by  air 
and  water  to  the  Panama  Canal ;  the  plans  for  fortifying  certain  rocky 
regions  dominating  the  Atlantic  section  of  the  proposed  Nicaragua  water- 
way; his  anti- American  publications,  which  were  so  well  received  by  the 
pro-German  part  of  the  public  in  Central  America,  etc. 

The  facts  related,  however,  should  prove  sufficiently  convincing  for  our 
present  purpose.  It  goes  without  saying  that  the  writer  can  fully  prove 
his  statements,  through  original  documents,  corroborating  facts,  and  a  host 
of  witnesses,  and  that  all  of  the  data  enumerated  were  furnished  from  time 
to  time  to  the  United  States  Government. 


23 


PRESIDENT    GONZALEZ'    SCRAP-OF-PAPER    THEORY. 
His  Frantic  Schemes  to  Bar  Americans  from  Costa  Rica. 

As  soon  as  the  American  interests  had  secured  control  of  the  oil  lands, 
President  Gonzalez  proceeded  with  unusual  cunning  to  conspire  against  them. 
His  first  step  was  to  discourage  them  by  claiming  that  the  oil  titles  would 
lapse  a  year  later  and  that  he  therefore  strongly  advised  against  investing 
therein.  He  so  cabled  and  wrote  to  his  Minister  in  Washington,  Dr. 
Roberto  Brenes-Mesen,  a  very  estimable  gentleman,  profound  scientist  and 
philosopher  of  the  highest  standing.  The  following  cable  and  letter  from 
Gonzalez  to  his  Minister,  sent  in  March,  1915,  are  interesting. 
Cable: 

"  Rights  denounced.  Their  termination  is  on  April  26th  of 
next  year.  Extension  requested  by  Rafael  Montufar.  I  replied 
negatively.  The  business  can  be  arranged  directly  with  the  Gov- 
ernment of  Costa  Rica." 

The  rights  denounced  are  the  oil  lands  which  the  American  group  had 
acquired.    Rafael  Montufar  was  the  agent  of  the  original  owners. 
Letter. 

"  The  petroleum  question  is  one  of  great  importance  to  us, 
inasmuch  as  it  constitutes  one  of  the  strongest  hopes  of  the  state. 
The  so-called  National  Company  is  thinking  of  exploiting  the 
industry.  That  Company  is  represented  in  New  York  by  Rafael. 
Montufar,  but  I  understand  that  it  will  not  be  able  to  negotiate  upon 
the  basis  of  petroleum  for  the  simple  reason  that  the  term  for  the 
practical  establishment  of  the  industry  lapses  on  April  26,  1916, 
according  to  the  decree  of  April  18,  1914,  and  more  time  would  be 
required  to  deal  with  any  American  company,  inasmuch  as  the  local 
company  has  no  capital.  The  National  Company  has  tried  to  secure 
the  granting  of  an  extension  until  two  years  after  the  signing  of  the 
European  peace,  so  that  its  right  may  not  lapse,  but  I  have  refused 
this  extension.  At  any  cost  I  want  those  denouncements  to  be  ter- 
minated, so  that,  in  accordance  with  the  law,  all  the  petroleum 
deposits  in  the  country  remain  the  property  of  the  state.  Therefore, 
I  believe  that  in  view  of  this  status,  it  is  only  from  the  Government 
that  petroleum  mines  may  be  definitely  secured.*' 

It  is  interesting  to  point  out  the  similarity  between  President  Gonzalez' 
petroleum  policy,  as  outlined  in  this  letter  of  four  years  ago,  and  the  attitude 
assumed  in  the  oil  question  by  President  Carranza  of  Mexico. 

Gonzalez  was  well  versed  in  the  German  "  scrap-of-paper  "  theory.    He 


24 

realized  that  by  refusing  to  deal  with  Americans  of  standing-  he  would 
exhibit  himself  openly  as  anti-American,  especially  after  he  had  crossed  the 
thin  ice  of  the  Telefunken  case.  He  invited  the  United  States  group,  there- 
fore, to  enter  into  a  special  contract  with  his  Government  and  abandon  the 
privately  acquired  lands.  The  agreement  was  so  framed  as  not  to  be  valid 
without  legislative  approval.  His  sly  scheme  was  evidently  not  to  submit 
3uch  a  contract  to  Congress  until  after  the  lapsing  of  the  acquired  rights, 
and  then  use  pressure  upon  Congress  to  have  the  American  concession 
rejected,  thereby  leaving  the  American  interests  ''  high  and  dry."  That  this 
was  his  plan  is  fully  proven  by  subsequent  events.  His  first  step  was  to 
officially  suggest  a  contract  with  the  Government,  as  shown  by  the  following 
letter  of  March  13,  1915,  from  his  Washington  Minister,  Dr.  Brenes-Mesen, 
to  the  oil  men : 

"  In  accordance  with  the  reply  from  my  Government,  I  desire  to 
inform  you  that  the  rights  represented  by  our  mutual  friend,  Mr. 
Rafael  Montufar,  will  lapse  in  the  coming  year,  and  even  though  a 
negative  reply  was  given  to  a  proposition  for  an  extension,  the 
Government  of  the  Republic  is  well  disposed  to  arrange  the 
business  directly  with  the  Company  to  be  formed  here.  It  appears 
to  me,  therefore,  that  it  would  be  best  not  to  lose  time,  and,  for  that 
reason,  as  well  as  on  account  of  the  offer  which  I  have  made  to  you 
and  to  Mr.  Stelling,  I  hasten  to  advise  you  of  the  attitude  of  the 
Costa  Rican  Government  in  regard  to  this  business,  which  I  trust 
will  be  lucrative  for  you,  so  that  it  may  likewise  be  for  my  country." 

It  has  later  been  convincingly  shown  that  Dr.  Brenes-Mesen,  who 
signed  this  letter,  trusted  the  good  faith  of  his :  Government  and  had  no 
knowledge  of  Gonzalez'  wily  anti-American  schemes.  At  that  time  the 
writer  himself  had  no  reason  for  in  the  least  doubting  the  sincerity  of  the 
Costa  Rican  Government,  the  Minister's  personality  alone  being  sufficient 
to  invite  full  confidence.  Gonzalez'  plan  was  therefore  accepted,  and  the 
Costa  Rican  Legation  extended  to  the  oil  men  official  letters  of  introduction 
to  the  President  of  the  Republic  and  the  Minister  of  Foreign  Affairs. 

Two  months  later,  Mariano  Guardia,  Secretary  of  Finance  in  the  Gon- 
zalez Cabinet,  arrived  in  this  country  authorized  by  the  President  to  work 
out  the  oil  contract  with  the  American  group.  The  Costa  Rican  Minister 
in  Washington  thereupon  sent  Mr.  Guardia  the  following  letter  on  Mav 
28,1915: 

"  Being  greatly  interested  in  the  petroleum  business  of  Costa 
Rica  for  what  it  will  probably  mean  for  our  country,  I  would  ask  you 
that  you  communicate,  on  your  arrival  in  New  York,  with  Mr. 
Washington  S.  Valentine,  17  Battery  Place,  a  prominent  person,  who 
forms  part  of  the  Company.  I  believe  that  you  can  take  with  you 
to  Costa  Rica  excellent  news  and  perhaps  a   definite  arrangement 


25 

advantageous   for  Costa  Rica  and  for  the  Company  to  be   formed 
here." 

Numerous  conferences  were  held  by  the  American  oil  men  with  Mr. 
Guardia,  as  agent  for  the  Gonzalez  Government,  and  eventually  a  contract 
was  framed,  agreed  upon  and  handed  to  Dr.  Brenes-Mesen,  who,  having 
resigned  his  Washington  post,  was  returning  to  Costa  Rica.  The  capital- 
ists were  unwilling  to  proceed  there "  themselves  unless  Gonzalez  would 
signify  his  prior  approval  in  principle  of  the  oil  contract  as  drafted.  This 
the  President  did,  as  shown  in  the  following  letter  from  Dr.  Brenes-Mesen, 
dated  Costa  Rica,  June  22,  1915;  to  the  oil  group  in  New  York: 

"  It  gives  me  much  pleasure  to  confirm  my  cable  of  this  day, 
which,  with  its  only  word  'Success',  has  revealed  to  you  that  the 
negotiations  entrusted  to  me  have  been  accepted  by  the  President 
of  the  Republic. 

**  He  has  agreed  to  deal  directly  with  the  American  Company, 
with  the  understanding  that  that  Company,  in  turn,  will  deal  with 
the  Compania  Nacional  quite  independent  of  Government  action. 
That  is  to  say,  the  Government  maintains  its  attitude  towards  the 
latter.  It  will  not  extend  the  concession  contained  in  the  denounce- 
ments, but  the  Government  believes,  as  you  and  I  do,  that  it  would 
be  well  for  the  American  Company  to  interest  the  Compania  Nacional 
in  its  business,  on  the  one  hand  because  in  this  manner  the  work  will 
begin  immediately,  and  on  the  other,  on  account  of  the  ties  of 
sympathy  which  will  thereby  be  established  between  natives  and 
foreigners,  this  constituting  a  strength  the  value  of  which  you  will 
know  how  to  appreciate. 

"Inasmuch   as   the    Pearsons    (British   concern),   according   to 
the  President's  statement,  offered  a  10  per  cent,  and  a  12  per  cent, 
royalty,  I  deemed  it  prudent  to  state  that  you  would  have  no  difficulty 
in  dealing  upon  a  similar  basis     *     *      " 
In  August,  1915,  the  American  .principals  arrived  in  Costa  Rica  and 
were  well  received  by  the  President  and  the  officialdom.     However,  Gon- 
zalez did  not  like  the  tentative  agreement  as  drafted  in  New  York,  and 
personally  drew  up  another.     Lengthy  discussions  followed  with  the  Presi- 
dent and  the  Minister  of  Public  Works;  amendments  were  agreed  upon 
and,  finally,  on  September  23,  1915,  a  contract  was  signed  by  Mr.  Greulich, 
heading  the  United  States  group.  President  Gonzalez,  and  the  Minister  of 
Public  Works,  Enrique  Pinto.     This  contract  was  recorded  in  the  official 
book  containing  government  -initiatives,  with  the  following  closing  phrase : 
u*     *     *     i^  £^j^^  whereof  the  contracting  parties  subscribed 
hereto  at  San  Jose,  on  September  23,   1915,  Enrique  Pinto,  L.  J. 
Greulich,  San  Jose,  September  23,  1915.     The  foregoing  contract  is 
approved,    Gonzales.     The   Secretary   of   State   in   the   Ministry   of 
Public  Works.     Pinto." 


;26 


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27 


MANUEL   CASTRO    QUESADA,    WASHINGTON    MINISTER,    TO 
PRESIDENT    GONZALEZ. 

"  New  York,  December  17th,  1915. 
"My  Dear  Alfredo: 

"  Yesterday  I  wrote  you  a  long  letter  on  purely  personal  matters ; 
to-day  I  want  to  discuss  with  you  political  or,  rather,  public  affairs. 

"  Before  all,  a  big  hug  for  the  complete  and  overwhelming 
triumph  that  you  have  had  in  the  elections  and  which,  to  the  greater 
discredit  of  our  enemies,  was  superior  even  to  what  you  had  figured 
on  just  before. 

"  This  is  the  best  muzzle  for  your  opponents  who  have  exhibited 
themselves  most  sadly.  Above  all,  Don  Rafael.  That  a  party  chief 
aspiring  to  the  presidency  should  not  have     *     *     *  " 

The  elections  mentioned  are  those  of  Congressmen  where,  through  the 
suppression  of  free  suffrage,  Gonzalez  had  been  successful  in  securing  what 
he  considered  a  safe  majority.  There  follows  a  diatribe  against  Rafael 
Yglesias  (Don  Rafael)  who  had  been  President  for  eight  successive  years, 
leaving  his  high  office  poorer  than  when  he  assumed  it,  after  having  given 
wonderful  impulse  to  the  development  of  his  country. 


28 

President  Gonzalez  then  presented  to  Mr.  Greulich  the  pen  with  which 
the  document  had  been  signed.  Handshakes.  Entertainments.  Pleasant 
words.  And  Mr.  Greulich  returned  to  the  States  to  make  his  financial 
arrangements  and  assemble  his  geological  staff,  drilling  outfits,  etc. 

A  contract  of  this  sort,  for  the  leasing  and  development  of  national 
wealth,  requires  the  ratification  of  the  Legislature.  President  Gonzalez 
promised  to  secure  this  within  a  few  weeks,  stating  that  the  matter  should 
be  left  to  him,  as  he  knew  how  to  handle  his  Congressmen  and  expected  no 
trouble  whatever. 

The  writer,  with  his  family,  remained  in  Costa  Rica,  in  charge  of  the 
petroleum  interests,  and  formed  a  cordial  friendship  with  the  President 
and  other  prominent  Costa  Ricans.  Invitations  were  plentiful,  Don  Alfredo 
making  himself  very  agreeable. 

Weeks  passed  pleasantly  but  Gonzalez  made  no  sign  of  convening  Con- 
gress for  the  approval  of  the  grant. 

"  That  is  all  right,"  he  said  to  the  author  "you  may  go  ahead 
getting  your  machinery  down  here.     I  shall  call  the  Legislature  in 
a  few  weeks  to  ratify  the  concession." 
Watchful  waiting  and,  finally,  another  attempt  to  have  Gonzalez  carry 
out  his  part  of  the  agreement. 

"  The  trouble  is  this,  my  dear  friend,"  he  said,  "  I  am  afraid 

of  a  group  of  Congressmen  who  want  to  oppose  everything  I  do. 

Here  are  their  names.     Talk  to  them  and  have  them  sign  a  statement 

wherein   they  obligate   themselves   not   to   discuss   politics   when   I 

convene  them  for  the  oil  matter,  and  to  limit  the  discussion  solely 

to  your  contract." 

The  author  agreed  to  do  this  and,  a  few  days  later,  was  in  position  to 

ipresent  to  the  Executive  the  following  document  signed  by  twenty-two  out 

of  a  total  of   forty- three  Congressmen,  a  sufficient  majority  to  pass  the 

measure : 

.  "  San  Jose,  October  9,   1915. 
"  The  Editor  of  '  La  Informacion',  City. 

"  Dear  Sir — In  today's  issue  of  *La  Informacion'  there  appears 
an  interview  with  the  Minister  of  Fomento,  wherein  the  possibility 
of  calling  Congress  into  extra  session  is  considered,  for  the  purpose 
of  taking  cognizance  of  the  recently  signed  contract  for  the  exploita- 
tion of  petroleum  mines. 

"  Recognizing  the  importance  to  the  economic  life  of  the  country 
of  the  petroleum,  the  Minister  of  Fomento  expresses  the  advisability 
of  dealing  with  the  matter  at  once,  in  order  to  have  that  rich  industry 
established  on  our  soil  as  soon  as  possible;  but  he  states  that,  owing 
to  special  circumstances,  the  Executive  will  not  convene  Congress  at 
present. 


29 

"  Your  paper  inquires  what  these  special  circumstances  are  which 
prevent  the  Executive  from  calHng  Congress  at  this  moment  and 
whether  among  them  may  be  counted  the  fear  that  poHtics  will  be 
injected  into  the  petroleum  issue? 

"  We  deem  it  our  duty  and  a  matter  of  self-pride  to  clear  the 
doubts  of  your  paper  and,  through  it,  inake  it  plain  to  the  country 
as  a  whole  that  we  declare  very  emphatically,  in  order  to  safeguard 
our  position  as  representatives,  that  we  have  never  attempted  in 
Congress  to  carry  on  a  systematically  hostile  policy  against  the 
Chief  of  State. 

"  The  present  case  of  the  petroleum  contract  makes  it  clear  to  us 
that  not  only  is  it  not  a  matter  of  imposing  new  taxes  upon  the  citi- 
zen but,  quite  the  reverse,  it  creates  an  additional  fiscal  income,  a  new 
source  of  wealth  for  the  Republic.  This  is  enough  to  make  us  in 
Congress  consider  the  matter  from  the  patriotic  viewpoint  and,  in 
nowise,  with  a  feeling  of  political  partisanship. 

''  Let  this  be  the  opportunity  for  us  to  state  that,  if  the  Executive 
calls  Congress  into  special  session  to  debate  the  petroleum  contract 
we  shall  do  nothing  but  examine  it,  our  minds  free  from  all  ideas  of 
politics,  and  if,  as  we  trust,  it  is  satisfactory  to  the  country,  approve  it. 

"  We  remain,  dear  sir, 

"  Yours  very  truly, 

*'  For  myself  and  for  Lie,  Francisco  Faerron, 

"  Luis  Anderson, 
"  Leon  Cortes, 
"  Juan  R.  Flores  C, 
"  Juan  Ma.  Solera, 
"  Aristides  Aguero, 
"  Arturo  Volio, 

"  For  myself  and  my  brother.        Napoleon  Briceno, 

"  Leonidas  Briceno, 
"  Jenaro  Leiva, 
"  Alberto  Vargas  Calvo, 
"  Leonidas  Pacheco, 
"F.  Aguilar  B., 
"  Carlos  Duran, 
"  Manual  J.  Grillo, 
"  Carlos  Leiva  Q., 
"  V.  Lachner  Sandoval, 
"  Marcial  Alcizar, 
"  R.  Jimenez  S., 
"  Rafael  Calderon  Munoz. 


30- 

"  Neither  systematic  nor  any  other  kind  of  politics  against  the 
Government  in  Congress. 

"  F.  DE  P.  Amador. 

"  The  undersigned  agrees  that  Congress  be  convened  in  special 
session  for  the  purpose  of  considering  the  petroleum  contract  recently 
entered  into  between  the  Government  and  an  American  company. 

"  R.  Rivera  B." 

The  signatures  include  those  of  prominent  Costa  Ricans,  wealthy,  of 
absolute  integrity  and  high  professional  standing  as  lawyers,  physicians  and 
diplomats.  These  men,  certainly  above  reproach,  signed  the  appeal  to  the 
President  because  they  considered  the  exploitation  of  the  Costa  Rican  oil 
fields  by  American  capital  as  the  most  feasible  means  of  providing  new 
revenue  to  the  depleted  treasury,  without  resorting  to  the  creation  of  new 
taxes. 

This  document  placed  Gonzalez  in  a  peculiar  plight.  He  never  expected 
that  a  legislative  majority  would  sign  so  strong  and  binding  an  appeal.  If 
he  acted  upon  it,  the  American  grant  was  certain  of  approval.  How  pre- 
vent it?  It  was  the  acid  test  of  his  good  faith  under  which  his  gilded 
veneer  dissolved.  Nice  words,  pleasant  smiles,  and  a  picnic  were  his  diplo- 
matic reply,  and  the  irresistable  request,  as  a  personal  favor,  that  the  matter 
be  delayed  a  little  longer. 

"Early  in  December,"  he  said,  "that  is  to  say,  only  five  weeks 
from  now,  there  will  be  an  election  of  Congressmen  and  half  of  the 
present  Legislature  will  be  out  of  a  job.  The  new  half  to  take 
their  place  will  be  mine — only  mine,"  and  he  smiled  slyly.  "  I 
promise  you  that  I  will  convene  Congress  immediately  after  the 
Congressional  elections,  and  your  contract  will  then  go  through 
flying     *     *     *." 

What  else  was  there  to  do  but  wait?  The  writer  then  had  no  reason 
for  doubting  the  President's  sincerity  clothed  in  his  charming  and  deceiving 
personality.  An  Englishman,  a  Frenchman  or  a  German  would  have  been 
assisted  by  his  Government  in  such  a  case,  through  the  Legation's  friendly 
offices;  but  for .  an  American  classified  as  a  "concession  hunter"  under 
President  Wilson's  interpretation,  what  chance  on  earth  was  there,  however 
willing  our  envoy? 

Nevertheless,  the  writer  deemed  it  wise  to  make  the  attempt  and  in- 
form the  State  Deiiartmeht  of  the  situation,  by  writing  on  November  9, 
1915,  a  letter  to  Hon.  Edward  J.  Hale,  American  Minister  to  Costa  Ricii, 
wherein,  after  subrriitting  a  copy  of  the  petroleum  concession  and  point- 
ing out  that  th^  Government:  of  Costa  Rica  was  receiving  thereunder  as 


3i 

large  a  royalty  as  any  holder  of  oil  lands  in  the  States,  the  following  state- 
ment was  made; 

"*  *  *  His  Excellency,  the  President  of  Costa  Rica,  has 
expressed  to  me  his  desire  of  obtaining  a  speedy  congressional  ap- 
proval of  the  concession.  He  considers  it  of  immense  value  to  the 
country,  as  indications  warrant  the  hope  that  the  petroleum  income 
will  eventually  become  the  largest  source  of  wealth  in  Costa  Rica. 
However,  there  being  evidence  of  peaceful  but  strong  political  dis- 
turbance in  view  of  the  pending  congressional  elections,  His  Excel- 
lency preferred  not  to  risk  distortion  of  the  petroleum  contract  by 
dissatisfied  political  elements  in  Congress.  He  intends  to  submit  the 
concession  and  urge  its  approval  about  the  middle  of  December  next. 
His  Excellency,  as  well  as  his  Cabinet,  feel  very  confident  that  the 
contract  will  be  approved  by  Congress  without  difficulty.  My  own 
impression  is  equally  favorable,  as,  after  discussing  the  matter  with 
a  majority  of  Congressmen,  I  found  unanimous  approval. 

"  We  have  acquired  about  98  per  cent,  of  all  existing  private 
petroleum  rights  totalling  about  1,000,000  acres.  Consequently  close 
to  1,000  Costa  Rican  families  are  interested  with  us.  This  seems 
to  have  created  general  harmony,  as  the  people  have  become  con- 
vinced that  our  policy  will  not  be  one  of  absorption  and  monopoliza- 
tion, as  occurred  unfortunately  in  other  large  American  enterprises 
in  Central  America,  but  a  policy  of  collaboration  and  harmonization. 

"  I  must  add  that  our  enterprise  is  thoroughly  and  purely  Amer- 
ican, composed  solely  of  Americans,  and  will  be  organized  and 
financed  in  the  United  States." 

On  November  25,  1915,  the  author  wrote  to  Herbert  Noble,  a  New 
York  attorney,   among  other  things  the   following: 

"  *  *  *  The  personal  relations  which  it  has  been  possible  for 
me  to  cultivate  with  the  President  have  enabled  me  to  talk  with  him 
from  time  to  time  about  pending  matters.  My  conclusion  is  un- 
changed, that  he  is  absolutely  sincere  and  very  well  disposed  towards 
the  petroleum  contract.  His  intention  still  is  to  call  Congress  together 
to  settle  this  and  your  banana  contract,  as  soon  after  the  coming 
elections  as  he  considers  the  various  rebellious  political  elements 
sufficiently  quieted  down.  He  has  explained  to  me  fully  matters 
pertaining  to  internal  politics,  evidently  with  a  view  to  making  us 
realize  the  advisability  of  not  conyenirig  Congress  before  the  end  of 
^  V.      December  or  the  beginning  of  January."  i  ^-'^    -  •;      • 

1"  December  came.  The  congressional  elections; '6r  rather  qtiasi-elections, 
were  held,  and,  by  deliberately  suppressing  free  sufff age/ Goiizalez  secured 
what  he^  thought  was  a 'safe  GovT^rflntent  fmlorityP/'K-i'  ^The  Germans 


32 

considered  themselves,  therefore,  stronger  than  ever.  The  Kaiser's  plans 
had  made  as  rapid  strides  in  Costa  Rica,  the  President  and  his  Hun  coterie 
thought,  as  the  German  troops  on  the  Western  Front     . 

Immediately  after  the  Executive  had  thus  strengthened  himself  in  Con- 
gress, his  attitude  towards  the  American  oil  enterprise  changed  as  if  by 
magic.  Kiimpel,  the  Rasputin,  Altschul,  the  German  Krupp  Agent,  Fetters, 
the  Hun  advisor,  and  Dieguez,  the  counsellor  and  agent  of  European  petro- 
leum interests,  had  been  in  frequent  .conferences  with  him,  as  was  later 
disclosed,  and  that  had  sealed  the  immediate  fate  of  the  American  grant. 
The  author's  letter  to  Herbert  Noble,  of  December  23,  1915,  explains  the 
impasse  more  fully: 

"  I  had  about  a  two-hours'  talk  with  the  President.  The  various 
points  discussed  are  so  eminently  important  that  I  shall  enumerate 
them,  as  I  recall  them : 

"  1.  The  President  stated  outright  that  he  would  not  convene 
Congress  before  next  May,  as  the  convening  of  Congress  now  would 
mean  to  again  give  Congress,  of  which  the  opposition  holds  a  major- 
ity, a  chance  to  attack  the  legality  of  the  recent  elections  on  the 
ground  of  Government  pressure. 

"  2.  I  expressed  my  surprise  to  the  President  and  said  that  on 
the  strength  of  his  promise  to  me  prior  to  my  departure  for  Panama, 
I  had  cabled  you  that  Dr.  Greulich  had  made  his  preparations  accord- 
ingly, and  that,  therefore,  the  sudden  change  of  decision  would  cause 
grave  damage  to  the  enterprise. 

"  3.  The  President's  reply  was  that  there  were  other  reasons, 
apart  from  raisons  d'etat,  which  had  firmly  decided  him  not  to  con- 
vene Congress  before  May,  the  principal  reason  being  that  most  of 
the  Government  officials,  Congressmen  and  private  parties,  who  had 
spoken  in  favor  of  the  Greulich  contract,  did  so,  not  for  patriotic 
reasons,  but  because  they  were  personally  interested. 

"  My  pleasant  personal  relations  with  the  President  permitted 
•  me  to  interrupt  him  indignantly  at  the  inference,  but  the  President 
immediately  stated  that  I  had  misunderstood  him,  that  he  fully 
recognized  that,  we  had  acted  most  correctly  in  the  matter  from 
beginning  to  end,  but  that  many  important  people  were  interested 
in  the  petroleum  through  the  Compafiia  Nacional,  the  shares  of  which 
are  widely  distributed,  and  that  the  Cia  Nacional  had  become  valuable 
through  our  contract  with  it. 

"  I  replied  that  it  was  the  President  and  the  Minister  of  Fomento 
who  had  insisted  that  a  clause  be  inserted  in  the  Greulich  contract 
safeguarding  acquired  rights.  The  President  did  not  let  me  go  on, 
but  said  that  he  understood  very  well  that  our  contract  with  the  Cia 


33 

Nacional  was  prompted  by  good  business  policy,  and  that  he,  in  our 
place,  would  have  acted  in  the  same  manner;  that  is  to  say,  by 
acquiring  all  existing  rights,  regardless  of  their  value,  merely  for  the 
sake  of  good  feehng.  What  he  meant,  he  said,  was  that  speculators 
had  taken  advantage  of  the  situation  and  bought  shares  and  that  he 
did  not  propose  to  play  into  their  hands  by  having  our  contract  ap- 
proved now.  I  thereupon  called  the  President's  attention  to  the  fact 
that,  after  April,  the  situation  would  be  identical,  as  our  contract 
with  the  Cia  obligated  us  to  pay  it  its  2  per  cent,  after  as  well  as 
before  next  April     *     *     '^. 

"  5.  I  explained  *  *  *  that  based  upon  the  President's 
promises  Dr.  Greulich  had  made  his  preparations  by  organizing,  etc., 
and  that  delay  would  cause  serious  difficulties. 

"  6.  The  President  thereupon  made  the  surprising  statement 
that  he  did  not  consider  our  contract  as  beneficial  to  the  country,  that 
the  development  of  petroleum  in  Mexico  and  Venezuela  had  caused 
detriment  to  those  countries,  politically  and  otherwise,  that  it  meant 
the  concentration  of  too  great  an  individual  power;  that,  therefore,  he 
was  not  at  all  eager  to  see  the  petroleum  developed.  I  replied  by 
comparing  the  Mexican  Pearson  contract  with  the  Greulich  contract, 
showing  the  maximum  of  control  which,  through  its  arbitration 
clause,  the  Government  would  hold.  I  asked  the  President  to  name 
the  points  which  caused  him  the  fear  expressed,  and  he  referred  to 
our  right  to  cross  and  use  all  rivers,  build  telegraph  lines  anywhere, 
the  public  utility  feature,  etc.  My  answer  was  that  this  really  was  a 
matter  for  proper  limitation  and  language  and  that  I  considered  the 
Greulich  contract  as  amply  covering  it.  The  President  thereupon 
made  further  argument  unnecessary  by  agreeing  that  these  privileges 
had  been  sufficiently  limited  and  defined  in  the  Greulich  contract,  and 
that  in  his  remark  he  merely  referred  to  liberal  concessions  generally. 

«  *  *  *  j^^  President  hastened  to  state  that  he  was  generally 
in  favor  of  the  contract,  inasmuch  as  it  had  been  based  entirely  upon 
the  Pearson  concession  in  favor  of  which  he  had  been  at  the  time  of 
its  presentation,  and  that,  therefore,  he  had  signed  the  Greulich  con- 
tract.    *     *     * 

"  I  truly  believe  that  the  President  thinks  he  is  acting  quite  cor- 
rectly towards  us — the  idea  being  that  an  American  must  be  treated 
exactly  as  an  American  is  usually  pictured  to  the  Latin  as  dealing 
toward  him,  in  other  wards,  unscrupulously.  To  promise  everything 
and  keep  nothing  appears  to  him  as  absolutely  honest,  as  he  considers 
that  to  be  the  American  viewpoint. 

"I  really  think  that  we  have  made  a  serious  mistake  in  consider- 
ing the  President  as  frank  and  straightforward  from  our  standpoint." 


34 

A  few  days  later,  on  December  27,  1915,  President  Gonzalez  fell 
sufficiently  justified  by  the  advance  of  the  German  armies  on  all  fronts 
to  come  out  publicly  with  an  attack  against  the  Monroe  Doctrine.  The 
German  propaganda  paper  "  El  Imparcial,"  then  fully  recognized  by  every- 
one as  jointly  owned  and  controlled  by  the  Gonzalez  Government  and 
German  interests,  and  as  the  semi-official  mouthpiece  of  Gonzalez,  Kiimpel 
and  other  Germans,  published  a  sharp  editorial  in  Spanish  and  English, 
containing  the  following  passages : 

"  *  *  *  nor  would  the  Government  of  Costa  Rica  have  ever 
accepted  the  interpretation  that  some  American  business  men  want 
to  give  to  the  Monroe  Doctrine,  in  order  to  entirely  control,  for  their 
own  benefit,  the  wealth  of  this  continent  to  the  exclusion  of  European 
capital  and  enterprise.  Were  Costa  Rica,  which  is  a  small  country, 
forced  to  accept  this  Japanese  interpretation  of  a  '  closed  door/  such 
would  not  be  the  case  with  Great  Britain,  which  is  a  powerful  country 
and  which  would  never  have  stood  for  it,  as  its  acceptance  would  have 
meant  the  absolute  renouncement  on  the  part  of  the  British  to  employ 
their  energies  and  invest  their  capital  in  America. 

"  It  has  been  rumored  that  the  Administration  will  call  Con- 
gress into  special  session  on  the  15th  of  January  in  order  to  discuss 
the  subject  of  the  oil  grants.  This  report  is  also  false.  The  conces- 
sion granted  to  the  National  Oil  Company  will  expire  in  the  coming 
month  of  April  and  the  Congress  of  May  will  be  the  one  called  upon 
to  consider  said  contract  which,  even  if  signed  by  the  President,  still 
requires  the  formal  and  definite  ratification  of  Congress  which  prob- 
ably will  refuse  to  grant  those  concessions  as  the  contract  which  is 
apparently  advantageous  for  the  country  is  in  reality  unacceptable 
*     *     * 

"  These  oil  fields  being  located  near  the  Canal  Zone,  Costa  Rica 
could  easily  supply  fuel  to  merchantmen  and  warships,  and  the  region 
of  Talamanca  would  rapidly  acquire  the  importance  of  the  Tampico 
region  in  Mexico,  the  wells  of  which  were  confiscated  cibout  six 
months  ago  by  the  Carranza  Government,  which  has  now  been  recog- 
nized by  the  United  States  and  by  the  governments  of  the  countries 
comprising  the  Quadruple  and  the  Double  Ententes.     *     *     * 

"  Some  will  ask :  Why  is  it  then  that  the  Adminstration  accepted 
that  contract  with  Messrs.  Greulich,  Noble  and  Valentine  and  will 
submit  in  due  course  to  Congress?  The  answer  is  obvious:  The 
Administration  fulfills  its  duty  in  referring  to  Congress  such  impor- 
tant matters  which  need  the  amplest  study  of  both  branches  of  the 
Government.  This  does  not  mean  that  the  Administration  absolutely 
recommends  this  contract  in  the  manner  customary  in  a  project 
acknowledged  and  adopted  as  emanating  from  the  Executive  hi/mself. 


35 

"  *  *  *  Fate  has  not  yet  said  the  last  word  in  reference  to 
the  future  of  these  wonderful  countries." 

With  remarkable  effrontery,  Gonzalez  disclaimed  that  he  himself  had 
invited  the  American  group  to  come  to  Costa  Rica  and  personally  elaborated 
the  contract.  This  opened  the  writer's  eyes  and  he  began  to  suspect  that 
he  had  been  bluffed  by  the  President.  Upon  calling  on  him  and,  in  the 
same  friendly  spirit  which  had  existed  between  them,  asking  him  for  an 
explanation,  Gonzalez  was  surprisingly  frank  in  stating  that  he  was  opposed 
to  all  large  American  enterprises. 

This,  it  seemed,  was  the  time  for  our  Legation  to  use  its  good  offices, 
and,  on  December  30th,  1915,  the  author  addressed  a  letter  to  the  American 
Minister  saying,  among  other  things,  the  following : 

"  *  *  *  The  President  claims  that  if  the  present  Congress  is 
convened,  it  will  result  in  a  political  fight  against  the  Government  in 
view  of  the  outraged  condition  of  the  country  as  a  result  of  the 
electoral  pressure  at  the  last  congressional  elections.  This  is  incor- 
rect, as  I  have  the  written  and  public  promise  of  the  majority  of  the 
present  members  of  Congress  not  to  occupy  themselves  with  politics 
when  the  petroleum  contract  is  presented.  This  statement  was  given 
to  me  voluntarily,  as  the  people  consider  the  exploitation  of  petroleum 
without  delay  as  a  vital  point  in  providing  revenue  during  these 
critical  financial  times  in  Costa  Rica.  If  the  President  refuses  there- 
fore to  convene  Congress  now  as  promised,  it  is  due  to  his  decision 
to  prevent  the  approval  of  the  contract. 

"  On  December  27th  last,  the  enclosed  editorial  was  published  by 
"El  Imparcial"  (the  government  paper). 

"  I  saw  the  President  about  it  and  he  told  me  that  the  editorial 
was  practically  dictated  by  him ;  that  he  meant  every  word  of  it ;  that 
he  had  no  reason  for  being  guided  by  the  wishes  of  the  United 
States ;  that  he  had  no  reason  for  giving  American  interests  prefer- 
ence in  any  way  and  that,  after  the  termination  of  the  European 
War,  Costa  Rica  might  be  in  an  entirely  different  position  strat- 
egically. That  is  what  he  refers  to  in  the  underscored  passages  of 
the  editorial.  He  said  that  if  England  or  any  other  European  country 
wanted  the  Costa  Rican  oil  and  coal,  there  was  nothing  to  prevent 
him  from  granting  any  concession  desired.    *    *    * 

"  My  strong  impression  is  that  any  official  or  unofficial  interest 
shown  by  you  in  the  approval  of  the  Greulich  contract  will  result  in 
the  immediate  change  of  attitude  on  the  part  of  the  Government. 


36 

On  January  1,  1916,  the  author  wrote  to  the  American  minister  again, 
as  follows: 

"  The  President  of  Costa  Rica  thereafter  told  me  that  he  would 
see  with  displeasure  the  establishment  of  large  American  enterprises 
in  Costa  Rica,  as  the  United  States  would  thereby  acquire  too  great 
an  influence,  dangerous  to  Costa  Rica  in  view  of  her  strategic  posi- 
tion. He  insinuated  that,  after  the  termination  of  the  European  War, 
European  capital  might  be  obtained  on  better  terms. 

"  The  President  of  Costa  Rica  later  repeated  this  statement  to 
others.     *     *     * 

"  Through  great  pressure,  the  President  of  Costa  Rica  *  *  * 
recently  elected  a  Congress  composed  of  Government  tools,  following 
Government  suggestions  blindly.  Its  first  regular  session  will  be  next 
May.  The  President  of  Costa  Rica,  to  discharge  his  responsibility, 
wants  to  present  the  Greulich  contract  then  in  such  a  manner  as  to 
have  Congress  reject  it. 

"If  the  present  Congress  is  called  immediately  *  *  *  the  Greu- 
lich contract  will  be  approved,  as  the  whole  country  is  warmly  in  its 
favor  and  as  the  present  Congress  represents  the  people  impartially." 

Another  letter  of  the  same  date,  to  the  American  minister  contains  the 
following  passages : 

"  I  had  a  very  confidential  conversation  with  the  Minister  of 
Finance  and  Acting  Minister  of  Foreign  Affairs.  He  disagrees  en- 
tirely with  the  change  of  policy  on  the  part  of  the  Government  and 
considers  the  evident  unfriendly  attitude  toward  American  enterprise 
as  dangerous  for  Costa  Rica.  He  considers  the  Greulich  contract  as 
absolutely  binding  on  the  Government,  inasmuch  as  the  President 
himself  drafted  the  contract,  as  can  be  seen  from  penciled  annotations 
in  his  own  handwriting,  and  highly  approved  of  it,  satisfied  that  he 
had  obtained  a  good  bargain  for  his  country.  He  emphasized  the 
fact  that  this  contract  was  the  outcome  of  months  of  work,  of  dis- 
cussions between  the  Government  officials,  Dr.  Greulich,  Mr.  Herbert 
Noble  and  myself  and  that  the  President  had  formally  promised,  not 
only  to  ourselves  but  to  many  persons  of  good  standing,  Congressmen 
and  his  Cabinet,  that  he  would  convene  Congress  in  special  session 
directly  after  the  election  of  December  5th.  The  Minister  also  stated 
that  he  considered  the  editorial  referred  to  (of  December  27)  as 
offensive  to  the  United  States  and  Americans  generally  and  that  he 
would  never  subscribe  to  such  a  fatal  policy.  He  added  that  the 
Government  of  Costa  Rica  was  bound  by  word  of  honor  and  inter- 
national custom  to  fulfill  its  promise  of  convening  Congress  early  in 
January  for  the  purpose  of  ratifying  the  Greulich  contract  and 
present  it  with  a  strong  message  of  recommendation.    *    *    * 


"  The  President  of  Costa  Rica  yesterday  expressed  to  Dr. 
Saturnino  Medal,  Justice  of  the  Central  American  Peace  Court,  views 
similar  to  those  he  gave  me  on  December  27,  regarding  the  undesir- 
ability  of  large  American  enterprises    *    *    *." 

Realizing  that  serious  complications  were  threatening,  the  writer  made 
a  further  attempt  to  reach  a  friendly  solution  and  on  January  6th,  1916, 
wrote  to  the  President  the  following  letter : 

"  As  I  had  the  pleasure  of  stating  to  Your  Excellency,  Mr. 
Greulich  went  ahead,  immediately  after  your  Excellency  signed  the 
petroleum  contract,  with  the  organization  and  necessary  preparations 
regarding  machiner>-,  experts,  etc.,  as  the  said  contract  appeared  so 
well  received  in  official  and  private  circles  as  to  fully  justify  such 
preparations. 

"  It  would  appear  regrettable  to  me  if,  as  a  result  of  existing 
circumstances,  on  the  one  hand,  your  progressive  country  would  be 
deprived  of  the  immediate  development  of  a  new  and  probably  very 
large  industry  and,  on  the  other,  Mr.  Greulich  would  be  obliged  to 
withdraw  his  organization  with  financial  loss.  Therefore,  it  has 
occurred  to  me  that  Mr.  Greulich  might  begin,  under  the  respective 
mining  laws,  to  work  the  oil-bearing  private  lands  acquired  by  him, 
before  next  May,  preferably  at  once. 

"  Nevertheless,  I  would  not  like  to  advise  Mr.  Greulich  to  go 
ahead  if,  for  any  reason.  Your  Excellency  would  see  with  displeasure 
the  immediate  development  of  the  petroleum  industry  in  the  regions 
of  the  acquired  rights. 

"  Therefore,  I  have  taken  the  liberty  of  asking  your  Excel- 
lency's opinion  with  all  frankness  and  confidence,  and  I  hope  that 
he  will  be  so  kind  as  to  give  it  to  me,  so  that  I  may  advise  at  once 
Mr.  Greulich  by  cable. 

"  With  my  best  regards  and  repeating  my  sincerest  wishes  for 
a  happy  New  Year,  I  have  the  honor  to  remain,  etc." 

The  President  was  forced  by  this  letter  into  a  tight  corner,  therefore 
decided  to  play  the  wise  statesman  stunt,  as  advised  by  the  Kiimpel  clique, 
and  replied  on  January  7th  as  follows : 

"  The  contracts  which  the  Executive  signs  require  for  their 
validity  the  approval  of  Congress.  I  think,  therefore,  that  to  carry 
them  out  before  proper  legislation  is  premature. 

"As  to  the  other  rights  which  Mr.  Greulich  may  have,  not 
emanating  from  the  contract  pending  legislative  approval,  I  see  no 
objection  to  his  carrying  them  out  in  the  manner  which  he  may 


38 

deem  best,  especially  if  he  does  so  according  to  the  law  guaranteeing 
those  rights. 

"This  answers  your  favor  of  yesterday  and  I  take  advantage 
of  this  opportunity  to  wish  you  and  your  distinguished  wife  every 
kind  of  happiness  during  the  year  just  commenced." 

Upon  the  receipt  of  this  letter  the  author  called  on  the  President  and 
expressed  to  him  his  satisfaction  therewith,  informing  him  at  the  same 
time  that,  based  upon  the  license  it  contained,  he  had  advised  his  principals 
thereof  by  cable  and  that  geological  and  drilling  operations  on  the  privately 
acquired  oil  zones  would  be  commenced  at  once,  regardless  of  the  approval 
or  rejection  of  the  concession.  Gonzalez  replied  that  the  American  group 
was  free  to  do  so,  and  this  was  taken  as  an  assurance  sufficient  to  warrant 
the  operations.  The  geological  and  survey  work  was  organized,  drilling 
machinery  sent  down  and  a  large  amount  invested  in  the  development  of 
the  privately  owned  properties. 

,  With  the  advance  of  the  German  troops  in  Europe,  triumphantly 
announced  in  glaring  headlines  and  pretentious  editorials  by  El  Imparcial, 
the  President  thought  it  wise  to  further  fortify  himself  politically.  The 
coming  two  years  were  to  witness  the  success  of  the  Pan-Germans  and  the 
consequent  development  of  Latin  America  by  the  Deutsche  Bank  and  the 
Hamburg-American  Line  interests.  Gonzalez  thought  that  he  had  secured 
the  control  of  Congress.  Would  he  be  suffciently  strong  to  force  legisla- 
tion down  the  throats  of  his  deputies  in  the  face  of  strong  popular 
opposition?  Kiimpel  and  his  staff  found  the  solution.  Prior  to  his  ascen- 
sion to  the  Presidency  in  1914,  Gonzalez  had  assumed  to  cancel  the  campaign 
debt  of  the  Fernandistas  party  to  which  he  belonged. 

"  Don't  pay  it,"  said  Kiimpel,  "  seize  and  keep  the  documents 
guaranteeing  the  debt.  They  bear  the  signatures  of  the  most  im- 
portant Fernandista  deputies  and  other  valuable  political  elements. 
Hold  the  documents  as  a  club  over  them.  They  are  poor  and  you 
can  break  their  neck  financially  if  they  do  not  obey  you."  » 

Gonzalez  accepted  the  suggestion  and  the  agreement  with  the  political 
friends  who  had  lifted  him  into  the  presidency  became  a  scrap  of  paper. 

But  how  get  the  documents?  Easy!  What  is  a  constitution  among 
friends?  The  writer's  letter  of  January  1st,  1915,  to  the  American  Minister 
in  Costa  Rica,  explains  how  it  was  done : 

"  I  refer  to  the  failure  of  the  Commercial  Bank  of  Costa  Rica. 
Part  of  the  gold  reserve  of  that  institution  had  been  converted 
illegally  into  bonds  of  the  Northern  Railway  Company  of  Costa 
Rica.  *  *  *  Maximo  Fernandez  claims  that  the  campaign  ex- 
penses amount  to  420,000  colones.     *     *     *     The  sum  of  150,000 


39 

colones,  however,  Maximo  Fernandez  induced  the  Commercial  Bank 
to  furnish  against  a  joint  note  of  all  the  interested  Republicans 
guaranteed  by  M.  Fernandez.  For  the  purpose  of  raising  that  sum, 
the  Commercial  Bank  mortgaged  to  British  bankers  the  bonds  of 
the  Northern  Railway  of  Costa  Rica,  which  formed  part  of  the 
reserve,  as  stated  above.  When  the  Commercial  Bank  failed,  the 
note  referred  to  of  150,000  colones  was  among  its  assets.  It  was 
then  long  overdue.  A  settlement  was  made  of  the  affairs  of  the 
bank  by  which  its  affairs,  including  all  its  assets  and  liabilities,  were 
turned  over  to  the  Government  Bank,  the  '  Banco  Internacional,'  of 
which  an  American  of  absolute  integrity  (Mr.  Walter  J.  Field)  is 
President. 

"  About  ten  days  ago,  the  President  instructed  the  receiver  of 
the  Commercial  Bank,  Mr.  Ross,  to  request  Mr.  Field  to  deliver  to 
him  the  note  of  150,000  colones  referred  to.  Mr.  Field  refused, 
stating  that  he  was  responsible  for  the  affairs  of  the  Commercial 
Bank  and  that,  therefore,  he  could  not  deliver  any  part  of  its  assets 
unless  President  Gonzalez  would  relieve  him  of  all  responsibility 
by  requesting  him  in  writing  to  deliver  the  note.  This  the  President 
did  and  Mr.  Field  turned  the  note  of  150,000  colones  over  to  the 
President.  This  means  the  disappearance  of  150,000  colones  from 
the  assets  of  the  Commercial  Bank  without  reason  or  accountinsf, 
especially  without  the  deposit  of  an  equivalent  value.     *     *     *  " 

Feeling  stronger  still  as  a  result  of  this  high-handed  move,  Gonzalez 
thought  that  he  might  as  well  show  the  United  States  where  it  stood.  The 
author's  letter  of  January  6th  to  the  American  Minister  gives  a  good  idea 
of  the  President's  stand  taken  towards  our  country : 

"  Allow  me  to  repeat  to  you  the  information  given  me  this 
morning  very  confidentially  by  the  Minister  of  Finance.  He  had 
had  a  recent  discussion  with  the  President  regarding  the  petroleum 
matter.  The  President  acknowledged  that  he  had  inspired  the 
editorial  referred  to  in  my  previous  letters.  Among  other  things, 
he  expressed  dissatisfaction  with  the  attitude  of  the  U.  S.  toward 
Central  American  affairs,  referring  particularly  to  the  limit  question 
between  Costa  Rica  and  Panama,  the  President  being  exasperated 
owing  to  the  delay  on  the  part  of  the  U.  S.  in  carrying  out  the  White 
award. 

"  The  President  said  that  he  would  express  this  view  to  the 
U.  S.,  as  also  his  view  regarding  the  intended  establishment  of  a 
Pan-American  Court  of  Arbitration  now  discussed  at  Washington. 
*  How  can  Costa  Rica,'  he  said,  *  be  expected  to  favor  such  a  thing, 
if  the  existing  arbitral  awards  are'  not  carried  out  ? '    The  President 


40 


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41 


ANOTHER  EDIFYING  PLAN  OF  THE  GONZALEZ  CLIQUE  TO 
MAKE   MONEY   SECRETLY. 

From  confidential  correspondence  between  Manuel  Castro  Quesada, 
Gonzalez'  Minister  Plenipotentiary  in  Washington,  and  the  President 
(December  17,  1915)  : 

"  A  very  good  idea  occurred  to  me  for  the  Government  to  make 
money  without  anybody  being  able  to  even  smell  it.  It  consists  in 
raising  in  the  contract  a  few  points  the  commission  agreed  upon  and 
for  the  bankers  to  deliver  the  difference  to  the  Government.  What 
do  you  think  of  it? 

"  Then  the  loan,  instead  of  being  quoted  at  94  or  95,  as  I  am 
trying  to  arrange,  would  appear  at  90,  for  instance,  which  would  still 
be  a  rate  very  acceptable  for  our  countries." 

"  Hoping  that  before  you  receive  this  letter  I  shall  be  able  to 
give  you  by  cable  good  news  regarding  the  loan,  I  am 

"  Your  affectionate 

"  Manuel  Castro  Quesada." 

The  loan  which  Gonzalez  was  trying  to  obtain  was  to  be  of  $2,000,000.00. 
The  "  special  commission  "  which  his  group  was  thinking  of  getting  "  with- 
out anybody  being  able  to  even  smell  it "  was  therefore  to  amount  to 
$80,000.00  or  $100,000.00.  That  was  at  a  period  when  the  National  Treasury 
had  a  hard  time  making  both  ends  meet  and  even  the  salaries  of  the  minor 
Government  employees  could  only  be  paid  in  part. 


42 


/  6  DO 


1 


43 


PLAN    TO    DEPRIVE    NATIONAL    TREASURY    OF    PROCEEDS 
FROM  MUNITIONS  SALE. 

From  confidential  correspondence  between  Manuel  Castro  Quesada, 
Gonzalez'  Minister  Plenipotentiary  in  Washington,  and  the  President: 

"  *  *  *  the  Government  wished  to  keep  in  complete  reserve 
the  negotiation,  so  as  to  be  able  to  dispose  of  the  money  for  such 
expenses  as  cannot  and  must  not  be  made  public.  The  idea  looks 
good  to  me  but  not  its  realization  because,  frankly,  I  cannot  under- 
stand how  it  is  possible  to  have  the  1600  cases  leave  the  garrison  for 
the  station  without  anybody  perceiving  it.  But  anyhow,  as  far  as  I 
am  concerned  there  will  be  no  difficulty  in  keeping  the  secret. 

''  The  date  of  delivery  seems  very  pressing  to  me  but  it  was  not 
possible  for  me  to  obtain  an  extension;  but  I  think  that  by  moving 
actively,  the  article  can  well  be  shipped  on  the  steamer  of  January  2nd 
which  is  really  the  date  agreed  upon." 

This  letter,  handwritten  throughout,  on  the  stationery  of  the  Hotel 
Waldorf-Astoria,  New  York,  dated  December  17,  1915,  consists  of  ten  pages 
signed  "  Manuel  Castro  Quesada."  In  another  section  of  the  letter  the 
details  of  the  sale  are  explained.  The  price  agreed  upon  was  $30.00  per 
thousand  and  there  were  1600  cases.  The  proceeds  accruing  to  the  Gonzalez 
clique  would,  therefore,  have  amounted  to  a  handsome  amount. 


also  said  that  he  considered  himself  in  no  way  bound  by  his  signa- 
ture to  the  Greulich  contract  and  free  to  contract  with  whomever 
else  he  pleased.  The  Minister  of  Finance  said  that  he  would  not 
subscribe  to  this  view. 

"  I  take  it  from  these  statements  that  the  President's  attitude  in 
the  petroleum  matter  is  meant  as  a  sort  of  retaliation  against  the 
attitude  of  the  U.  S.  in  delaying  the  carrying  out  of  the  White 
award." 

In  true  autocratic  fashion,  Gonzalez  decided  that  "  I'etat  c'est  moi."  He 
needed  money  to  carry  out  his  designs  and  proceeded  to  get  it.  His  chum 
and  Washington  Minister,  Manuel  Castro  Quesada,  was  in  the  habit  of 
writing  him  long-hand  letters  from  the  Legation  in  Washington,  the  Waldorf 
Astoria  Hotel  in  New  York,  and  the  Legation's  summer  residence  in  Allen- 
hurst,  N.  J.  Extracts  from  the  following  correspondence,  penned  by  Castro 
from  the  Waldorf  Astoria  on  December  17,  1915,  give  a  rather  interesting 
idea  of  the  "  wheels  within  wheels  "  in  our  hero's  entourage : 

"  *  *  *  Before  all,  a  big  hug  for  the  complete  and  over- 
whelming triumph  that  you  have  had  in  the  elections  and  which  to 
the  greater  discredit  of  our  enemies  was  superior  even  to  that  which 
you  had  figured  on  just  before.     *     *     * 

"  I  am  preparing  a  cable  for  Mariano  which  says : 

"  *  I  have  sold  munitions  at  $30.00  a  thousand.  They  must  be 
shipped  next  week  or  the  following.  They  must  be  consigned  to 
Montero.  Take  the  present  labels  off  and  mark  them  again  "  in 
transit  New  York — Europe."    Telegraph  me  if  you  can.' 

"  The  price,  as  I  see  it,  cannot  be  better,  especially  if  we  con- 
sider that  the  first  offer  made  to  me  was  treating  the  article  as  if  it 
were  old  metal.  Possibly  these  munitions  will  be  sold  at  the  same 
price,  if  not  more,  than  they  cost  18  years  ago.  This  business  is  due 
to  Montero.  The  great  knowledge  which  he  has  of  people  in  New 
York  allowed  him  to  find  a  good  buyer ;  and  therefore,  at  the  same 
time,  as  he  lives  in  New  York,  I  thought  it  was  proper  that  the 
merchandise  should  not  be  consigned  to  me  but  to  him.     *     *     * 

"  The  Government  desires  to  keep  the  transaction  in  complete 
reserve,  so  as  to  be  able  to  dispose  of  the  money  for  such  expenses  as 
cannot  and  must  not  be  made  public.  The  idea  looks  good  to  me  but 
not  its  realisation,  because  frankly,  I  cannot  understand  how  it  is 
possible  to  have  the  1,600  cases  leave  the  garrison  for  the  station  zmth- 
out  anybody  perceiving  it.  But  anyhow,  as  far  as  I  am  concerned 
there  will  be  no  difficulty  in  keeping  the  secret. 

"  The  date  of  delivery  seems  very  pressing  to  me,  as  it  was  not 
possible  to  obtain  an  extension,  but  I  think  that  by  moving  actively. 


45 

the  article  can  well  be  shipped  on  the  steamer  of  January  2nd,  which 
is  really  the  date  agreed  upon. 

"  *  *  *  The  loan  which  I  am  negotiating  with  the  Bankers' 
Trust  seems  to  be  progressing  well.  It  will  surely  be  necessary  to 
raise  the  commission  of  5%  which  I  had  offered  to  O'Neill  or  accept 
more  onerous  conditions  than  those  which  I  had  asked  for  at  the  time, 
or  both  things  at  the  same  time,  but  naturally,  before  signing,  I  shall 
report  to  yoti  by  cable  whatever  may  be  convenient  so  that  you  may 
inform  me  whether  you  approve  of  it  or  not.  The  lawyer  upon  whom 
I  count  is  Mr.  Anderson.  You  know  quite  well  that  that  fellow  is  a 
tiger  as  far  as  money  goes,  and,  in  case  the  business  is  successful,  his 
account  will  be  very  large,  but,  at  the  same  time,  he  is  very  efficient 
and  has  an  almost  absolute  influence  over  people  of  money.  He  shows 
himself  very  optimistic,  and,  inasmuch  as  soon  after  Christmas  he  will 
have  to  go  to  England  for  account  of  the  Chicago  packers  to  make  a 
claim  against  the  British  Government  for  the  seizure  of  various  ships, 
he  is  pushing  the  matter  as  much  as  possible  so  as  to  have  everything 
resolved  before  his  departure.  It  should  have  been  decided  this  week, 
but,  unfortunately,  Mr.  Kent  spent  it  in  bed.  He  is  the  Vice- 
President  in  charge  of  the  business  and  will  not  return  to  his  office 
until  Monday. 

"  As  I  cannot  delay  my  return  to  Washington  any  longer,  I  shall 
leave  Rafael  here  to  discuss  with  Mr.  Kent  whatever  difficulties  he 
may  present.  At  all  events,  he  is  much  more  efficient  than  I  am,  very 
well  acquainted  with  the  business,  and,  moreover,  it  may  be  said  that 
he  was  its  initiator. 

"  *  *  *  A  very  good  idea  occurred  to  me  for  the  Govern- 
ment to  make  money  without  anybody  being  able  to  even  smell  it.  It 
consists  in  raising  in  the  contract  a  few  points  the  commission  to  be 
agreed  upon  and  for  the  bankers  to  deliver  the  difference  to  the  Gov- 
ernment.   What  do  you  think  of  it? 

''  Then  the  loan,  instead  of  being  quoted  at  9Ji  or  95,  as  I  am 

trying  to  arrange,  would  appear  at  90,  for  instance,  which  would  still 

be  a  rate  very  acceptable  for  our  countries.     *     *     *  " 

As  soon  as  the  American  oil  group,  encouraged  by  President  Gonzalez' 

express  sanction,  had  commenced  the  development  of  its  privately  owned 

zones,  the  President  started  a  vigorous  campaign  of  opposition. 

"  You  cannot  proceed,"  he  said,  "  because  your  rights  have  lapsed."  His 
Attorney  General  was  instructed  to  block  the  work  by  bringing  one  suit 
after  another,  and  a  strong  legal  fight  began. 

Many  prominent  American  jurists  express  the  opinion  that  Costa  Rican 
lawyers  are  among  the  brightest  on  this  continent.  It  is  also  known  that  the 
Courts  in  Costa  Rica  have  always  been  fair  and  square,  on  the  same  ethical 


46 

level  with  those  of  the  highest  developed  countries  in  orur  hemisphere.  This 
is  best  illustrated  by  the  fact  that,  in  the  little  Republic  mentioned,  the  Gov- 
ernment has  for  a  generation  lost  most  of  its  cases.  The  courts  are  entirely 
independent  of  politics  and  many  judges  have  held  office  for  over  thirty 
years.  Under  the  1917  constitution,  the  judges  of  the  higher  courts  are 
elected  for  life,  and  the  Supreme  Court  appoints  the  judges  of  the  inferior 
courts. 

As  in  this  country,  Costa  Rica  has  a  certain  ehte  of  lawyers  whose 
opinions  have  almost  decisive  weight.  The  Governments  preceding  Gon- 
zalez' were  in  the  habit  of  abiding  by  the  decision  of  these  attorneys  in 
intricate  legal  questions.  The  courts  have  always  been  guided  thereby  to  a 
great  extent.  This  elite  is  composed  of  various  former  Presidents  who 
happen  to  be  leading  lawyers :  Asencion  Esquivel,  Cleto  Gonzales  Viquez, 
Ricardo  Jimenez,  J.  J.  Rodriguez  and  Bernardo  Soto  (now  deceased),  and 
such  talents  as  Luis  Anderson,  who  is  Treasurer  of  the  American  Institute  of 
International  Law  and  was  President  of  the  Central  American  Peace  Con- 
ference ;  Leonidas  Pacheco  and  a  few  others. 

As  soon  as  the  oil  men's  legal  fight  with  the  Gonzalez  Government  com- 
menced, these  lawyers  were  consulted  and  all  of  them,  in  brilliantly  written 
briefs,  upheld  the  American  controlled  petroleum  titles.  To  relieve  the 
reader's  mind  of  any  suspicion,  it  is  pertinent  to  add  that  the  fees  paid  them 
were  nominal.  The  views  of  the  eminent  statesmen  named  could  not  be,  and 
certainly  were  not,  influenced  in  any  way  by  mercenary  motives. 

Gonzalez  made  a  futile  attempt  to  counteract  the  weight  of  their 
opinions  by  personally  influencing  the  judges. 

"  The  good  of  the  country  dictates,"  he  said  to  them,  "  that  the  American 
eagle  be  prevented  from  securing  this  strategic  stronghold.  You  must,  as 
true  patriots,  apply  the  law  in  this  sense," 

The  courts,  uninfluenced,  decided  in  favor  of  the  Americans  in  every 
instance,  and  the  pro-German  coterie  was  defeated  in  the  first  struggle. 

In  the  meantime,  the  thinking  public  had  become  aroused.  Over  a 
thousand  Costa  Ricans  had  a  royalty  agreement  with  the  concessionaire  on 
the  zones  which  they  had  leased  to  him.  The  President's  fight  Was  directed 
as  much  against  them  as  against  the  concessionaire's  enterprise.  Gonzalez 
tried  to  compromise  with  some  of  the  said  oil  zone  owners  by  promising  to 
"  take  care  "of  the  most  important  ones  among  them  if  they  would  break 
their  contracts  with  the  United  States  group.  Nobody,  however,  seemed  to 
be  disposed  to  bank  upon  Don  Alfredo's  promises,  and  practically  everyone 
remained  loyal  to  the  Americans. 

The  author  was  justified  in  expecting  that,  with  his  legal  victory,  the 
fight  would  be  over  and  that  Gonzalez  would  bow  to  the  decision  of  the 
tribunals.  But  far  from  it.  On  the  contrary,  he  made  it  plain,  privately 
and  publicly,  through  the  press  and  in  conversation,  that  he  would  continue 


47 

to  fight  the  American  enterprise  tooth  and  nail.  The  writer  thought,  there- 
fore, that  it  was  time  to  compromise,  and  approached  the  Executive  with  the 
proposition  to  abandon  the  concession  entirely  if  the  President  would  permit 
the  peaceful  exploitation  of  the  privately  acquired  areas.  It  was  of  no  avail. 
Gonzalez  was  insistent  that  American  interests  should  not  control  a  single 
drop  of  petroleum  in  Costa  Rica. 

The  matter  was  thereupon  taken  up  with  the  Costa  Rican  Legation  in 

Washington,  the  interesting  result  of  this  step  being  shown  in  a  letter  from 

the  Minister,  Manuel  Castro  Quesado,  of  May  15,  1916;  to  the  oil  group: 

"  I  had  the  pleasure  of  duly  receiving  your  favor  of  the  11th  inst., 

and  you  can  believe  me  that  I  feel  very  sorry  that  the  matter  which  I 

so  strongly  urged  and  which  the  majority  of  the  gentlemen  of  the 

Government  of  my  country  considered  just  and  reasonable,  has  not 

yet  been  arranged. 

"  I  suppose  that  the  delay  has  probably  been  on  account  of  the 
many  occupations  which  the  President  has  had  in  recent  weeks  in 
preparing  his  message  and  the  inauguration  of  the  sessions  of  Con- 
gress, but,  as  soon  as  he  is  able  to  straighten  out  matters  a  little,  he 
will  certainly  give  favorable  consideration  to  the  petroleum  business. 
"  In  the  present  message  to  Congress  which  I  have  the  pleasure 
of  sending  you  by  this  mail,  you  will  find  clearly  expressed  the  ill- 
feeling  which  the  President  has  towards  the  creation  of  new  foreign 
enterprises  in  his  country  (see  page  83)  and  that  is  the  reason  of  his 
desire  to  limit  as  far  as  possible  the  existing  enterprises,  among  which 
naturally  is  your  petroleum  enterprise. 

"  I  do  not  think  that  Lincoln  is  justified  in  supposing  that  a  cable 
from  me  could  induce  the  President  to  sign  the  proposed  compromise. 
My  views  are  well  known  to  him  and  my  visionary  cabled  phrases 
could  hardly  accomplish  what  I  did  not  secure  under  most  insistent 
and  repeated  conversations  with  him.  Nevertheless,  and  solely  on 
account  of  my  deference  for  you,  I  have  written  a  long  letter  by  this 
mail  to  the  President  wherein  I  more  or  less  repeat  what  I  have  per- 
sonally said  to  him  in  strong  language  so  often." 

This  letter  contained  the  following  inclosure : 

"  Extract  From  Message  of  Alfredo  Gonzalez,  President  of  the 

Republic  of  Costa  Rica,"  Submitted  to  Congress  on 

May  1,  1916. 

'"  Are  Large  Foreign  Corporations  Beneficial  to  the  Country? 

"  The  incentive  for  attracting  foreign  capital  for  the  develop- 
ment of  the  country,  for  the  creation  of  large  enterprises,  is  by  many 
considered  as  the  great  remedy  for  curing  the  bad  economic  condi- 


4S 

tions  from  which  we  are  suffering.  My  opinion  is  entirely  opposed 
thereto.  Foreigners  bringing  intelHgence  and  energy,  who  settle 
among  us,  whether  they  bring  some  capital  of  their  own  or  of  others, 
are  welcome.  Foreigners  who,  in  this  way,  have  come  to  our  shores 
and  identified  themselves  with  the  natives,  have  been  an  important 
factor  in  the  great  development ;  but  to  say  that  our  reserve  land,  that 
the  occult  wealth  in  our  sub-soil,  should  be  given  up,  should  fall 
into  the  hands  of  powerful  companies  who  exploit  them  by  means 
of  employees  and  laborers  principally  of  foreign  extraction;  who 
feel  like  foreigners  in  a  foreign  country ;  who  sow  no  seed  here  and 
in  some  cases  do  not  even  attempt  to  learn  our  language;  who  in 
their  offices  in  their  dealings  with  the  Costa  Rican  public  use  a 
foreign  language  and  send  their  products  out  of  the  country  to  pay 
dividends  and  who  in  this  way  take  from  our  soil  a  product  entirely 
lost  to  the  country — that  these  be  a  blessing  to  Costa  Rica  I  abso- 
lutely deny. 

"  We  constantly  hear  the  cry  that  immigration  should  be  fos- 
tered. This  would  mean  that  the  public  of  Costa  Rica  is  not  capable 
of  carrying  out  its  own  exploitation.  If  this  were  true,  it  would  not 
be  necessary  to  look  up  foreign  capitalists  to  develop  our  country, 
nor  would  it  be  wise  because,  by  so  doing,  it  would  increase  the 
scarcity  of  labor. 

"  On  the  other  hand,  we  hear  complaints  that  there  is  no  work, 
that  there  is  misery;  that  the  wages  paid  are  so  low  that  they  do  not 
even  give  a  tolerably  decent  living  to  the  laborer.  If  this  is  true, 
it  shows  that  the  population  of  Costa  Rica  is  rapidly  increasing  and, 
therefore,  requires  expansion,  and,  in  that  case,  it  proves  clearly 
that  we  should  not  give  up  the  little  reserve  land  that  we  still  have." 

The  situation  was  difficult  and  an  acute  crisis  seemed  to  have  been 
reached.  It  appeared  that  the  good  offices  of  our  Government  alone  could 
save  the  acquired  rights.  But  how  induce  the  State  Department  to  aid  a 
"concession  hunter?"  Our  American  Minister  in  Costa  Rica,  Major  Hale, 
a  civil  war  veteran,  was  certainly  favorably  disposed  and  active  and  would 
have  aided  very  ably  and  effectively  with  his  good  offices,  had  he  received 
the  necessary  instructions  from  Washington;  but  nothing  came  and  he 
was  powerless.  Finally,  briefs  on  the  situation  were  presented  to  the  State 
Department  with  a  formal  request  for  assistance,  on  May  26  and  June  7, 
1916,  and  Herbert  Noble,  a  New  York  lawyer,  wrote  the  author  as  follows : 

"  Enclosed  please  find  copy  of  a  brief  which  we  are  filing  with 
the  State  Department,  and  a  copy  of  my  letter  of  transmittal  to  Mr. 
Polk. 


49 

"  From  this  you  will  observe  that  I  have  discussed  this  whole 
matter  fully  with  Mr.  Polk  and  Mr.  Wright,  and,  upon  the  facts 
stated  by  me  to  them  (the  same  as  the  facts  set  out  in  the  brief), 
they  promised  that  they  would  instruct  Mr.  Hale  to  make  an  investi- 
gation, and  that,  if  he  found  that  what  Dr.  Greulich  said  was  true, 
to  at  once  make  suitable  representations  to  the  Costa  Rican  Gov- 
ernment to  protect  Greulich  in  his  rights  and  to  report  to  the  State 
Department  thereafter  for  further  instructions  if  anything  further 
was  needed     *     *     * 

"  You  realize  without  my  telling  you  that  the  Department  as  at 
present  constituted  takes  everything  with  respect  to  American  rights 
in  Latin  America  with  reserve." 

Nothing  came  of  it,  however,  as  merely  perfunctory  attention  was 
paid  to  the  matter  by  the  State  Department,  and  the  Gonzalez  Government 
was  permitted  to  continue  its  intrigues.  The  Costa  Rican  Congress,  with 
its  supposed  Administration  majority,  convened,  and  the  President  was 
confronted  with  a  new  problem.  The  petroleum  concession — his  own 
initiative  with  his  own  signature  affixed — was  pending  and  had  to  be  sub- 
mitted to  the  Legislature  for  approval.  He  did  not  hesitate  to  send  the 
concession  to  Congress  because  he  felt  sure  that  he  held  his  deputies  in 
sufficient  control  for  defeating  the  measure.  Therefore  he  went  so  far 
as  to  send  a  message  of  recommendation :  "  Study  it  carefully  and  approve 
it  wuch  such  concessions  and  explanations  as  you  may  deem  wise." 

At  about  the  same  time,  other  competitive  oil  interests  appeared  on  the 
scene.  They  all  claimed  to  be  American  concerns,  and  there  is  no  doubt  that 
there  were,  among  them,  some  of  the  largest  and  best  known.  One  firm 
of  New  York  stockbrokers,  however,  was  acting  for  European  interests. 
It  was  represented  by  Manuel  Dieguez,  a  prominent  Guatemalan  attorney- 
of  pronounced  anti-American  tendencies  who  was  closely  identified  with 
Alfonso  Altschul,  the  German  Krupp  representative.  It  developed  that 
Dieguez  was  the  paid  counsellor  of  Gonzalez,  retained  to  attack  the  writer's 
interests  and  a  member  of  the  Executive's  germanophile  entourage. 

The  brokerage  firm  mentioned  soon  revealed  itself  as  Gonzalez'  recog- 
nized favorite  in  the  oil  tangle.  The  reason  therefor  was  discovered  later 
when  it  was  shown  that  the  New  York  house  was  merely  the  agent  and 
cloak  for  European  interests  which,  fearing  the  opposition  of  the  Stars  and 
Stripes,  did  not  dare  to  show  their  face.  A  letter  from  a  gentleman  in 
London,  acting  f6r  the  European  principals,  to  one  of  their  representatives 
in  Costa  Rica,  contains  the  following  interesting  passages: 

"  *  *  *  All  in  all,  as  far  as  letters  go,  the  impression  is  that 
the  matter  should  have  been  commenced.  The  premature  sending  of 
the  attorney  was  due  to  the  cable  in  which  you  asked  that  he  be 


50 


51 


A    LETTER    REVEALING    THE    BRITISH    PLAN    TO    SECURE 
CENTRAL  AMERICAN  OIL  FIELDS. 

To  evade  the  restrictive  effect  of  the  Monroe  Doctrine,  strong  British 
interests  were  acting  under  the  cloak  of  a  respectable  New  York  stock 
brokerage  concern.  The  preceding  is  a  page  of  one  of' the  letters  exchanged 
between  London  and  Costa  Rica,  wherein  the  European  identity  of  the  prin- 
cipals is  shown.  The  American  stock  brokers  are  referred  to  as  "  American 
Agents  "  and  the  description  is  given  of  how  the  contract  was  drafted  and 
perfected  in  London  and  sent  to  these  "  American  Agents."  Reference  is 
also  made  to  the  necessity  of  depositing  large  sums  of  money  in  a  Costa 
Rican  bank,  because  "  the  interested  parties,  always  skeptical  in  those  coun- 
tries as  to  the  effectiveness  of  promises  of  this  sort,  must  be  taken  to  the 
bank  to  feel  the  money,  and  this  is  vital  for  success." 

During  President  Gonzalez'  fight  against  the  American  oil  grant,  the 
European  interests  were  represented  in  Costa  Rica  by  Manuel  Dieguez,  a 
member  of  the  President's  intimate  coterie,  and  his  paid  advisor. 


52 

sent.  You  state  textually  The  general  attorney  must  be  here  in 
April.'  The  American  Agents  were  so  informed,  and  these,  in  view 
of  the  difficulties  of  traffic,  passports,  etc.,  made  haste  in  sending 
him.  So  much  the  better,  if  his  presence  there  has  been  useful  to 
you  for  the  preliminaries.  On  the  other  hand,  everybody  here  was 
under  the  impression  that  you  would  only  ask  for  the  attorney  when 
the  business  was  accepted  and  the  aid  of  sufficient  elements  for  its 
approval  assured    *     *     * 

"  He  himself  confirms  your  opinion  that  there  would  be  strong 
opposition  on  the  part  of  others.  From  the  date  of  his  long  letters 
until  now,  we  have  your  cables  announcing  that  the  contract  was 
signed  with  the  Executive  and  would  soon  go  to  Congress     *     *     * 

"  I  wish  you  had  indicated  the  discrepancies  between  the  copy 
of  the  contract  which  you  received  and  the  one  which  the  attorney 
took  with  him.  The  original  document  was  written  at  my  home  on 
my  machine.  I  dictated  it  to  him  from  the  notes  I  had  taken  for 
some  time,  to  a  typist  which  they  had  sent  from  the  office.  I  sent 
you  one  of  the  duplicates  of  that  first  document.  In  sending  the. 
other  one  to  New  York,  we  noticed  that  it  contained  errors  and  it 
was  copied  again,  so  as  to  send  it  in  clean  shape     *     *     * 

"  At  all  events,  /  advised  you,  as  well  as  the  agents  in  New 
York,  that  this  document  was,  in  one  form  or  another,  a  draft  of  the 
general  plan  of  the  business  subject  to  rectifications  *  *  *  I 
trusted  Dr.  Dieguez  for  this  work.     *     *     * 

*'  Your  exigency  of  depositing  the  money  there  I  explained  here 
absolutely  on  the  same  terms  as  you  in  your  letter:  '  Uribe,' 
I  said,  '  must  be  able  to  take  the  interested  parties,  always  skeptical 
in  those  countries  as  to  the  effectiveness  of  pr&mises  of  this  sort, 
to  the  bank  and  make  them  'feel'  the  money;  and  this  is  vital  for 
success." 

"  They  immediately  took  steps  to  obtain  the  required  authoriza- 
tion and  the  bank  cabled  its  manager  there  to  find  out  whether  it 
had  the  complete  sum  at  its  disposal,  sending  for  the  present  the 
amount  of  the  Government  deposit.     *     *     * 

"  The  Government  is  going  to  receive  three  deposits  of  five  thou- 
sand pounds  each  as  a  guarantee  of  the  investment  of  twenty  thou- 
sand pounds,  fifty  thousand  pounds  and  one  hundred  thousand  pounds 
respectively  in  the  three  periods  of  two,  three  and  seven  years  in 
exploration  and  in  exploitation.  These  sums  so  guaranteed  con- 
stitute automatic  guarantees  that  during  these  twelve  years  the  con- 
tract is  entirely  in  favor  of  the  Government.  If  the  twenty  thousand 
pounds  are  not  invested,  the  five  thousand  pounds  are  lost.  And 
once  these  twenty  thousand  pounds  are  invested,  the  one  most  eager  to 


53 

make  the  enterprise  successful  is  the  capitalist,  who  will  then  have 
already  invested  a  total  of  about  one  hundred  thousand  pounds. 

"You  have  said  nothing  more  about  Nicaragua.  This  matter, 
far  from  being  rejected,  was  to  be  submitted  and  I  was  going  to 
submit  it  at  the  first  opportune  moment  in  view  of  its  impor- 
tance.    *     *     * 

"I  do  not  know  what  you  mean  by  'possible  economies  based 
upon  your  local  requirements  to  raise  funds  for  payments^  and  I 
do  not  see  how  you  can  obtain  such  funds  without  the  certainty  of 
getting  the  contract.  You  certainly  should  not  use  your  credit  and 
resources  for  such  a  purpose.  If  there  is  a  contract,  those  who 
should  pay  the  money  will  pay  it.  If  there  is  none,  there  should 
be  no  problem  of  payments.  As  far  as  you  are  concerned,  if  there 
is  a  contract  they  promise  here  that  they  will  send  you  very  shortly 
the  sum  you  ask  for,  as  an  advance  on  the  total  sum,  and  I  see  no 
difficulty  in  that  respect. 

"  The  question  of  shares,  regarding  which  I  wrote  you  various 
times,  is  different,  and  I,  knowing  the  matter,  insist  thereupon.  I 
have  not  handled  the  matter  from  its  beginning  for  nothing 
and  I  am  not  talking  through  my  hat.  In  your  hands  are  the 
reasons  for  changing  the  agreement  with  detriment  to  your  personal 
interests." 

The  above  extracts  contain  an  interesting  mathematical  problem  re- 
quiring algebraic  elucidation,  viz.,  look  for  quantity  "  X."  Five  thousand 
pounds  were  to  be  deposited  with  the  Government  as  a  guarantee.  Twenty 
thousand  pounds  were  to  be  spent  within  two  years.  Hence,  total  invest- 
ment after  two  years  twenty-five  thousand.  But  "  once  twenty  thousand 
are  invested,  the  capitalist  will  have  then  already  invested  a  total  of  about 
one  hundred  thousand."  Difference  seventy-five  thousand  pounds  or  three 
hundred  and  seventy-five  thousand  dollars,  or  quantity  "  X  "  looked  for. 
Where?     The  reader  may  guess. 

It  is  important  to  note  that  the  same  European  interests  were  going 
after  the  Nicaragua  petroleum.  Why,  of  course!  The  Monroe  Doctrine 
should  not  be  an  obstacle.  Let  the  Americans  get  an  oil  base  along  the 
proposed  canal  ?    Never  ! 

To  make  a  long  story  short.  Congress  was  baffled  by  the  tangle 
resulting  from  the  presentation  of  these  various  propositions  and,  especially, 
by  the  peculiar  urging  on  the  President's  part  that  Congress  reject  the 
American  concession  and  favor  that  of  the  stockbrokers  mentioned.  Gonzalez 
was  thereupon  requested  by  the  Legislature  to  appear  before  it  and  explain. 
Instead  he  sent  the  Minister  of  Public  Works.  The  session  was  public  and 
the  Minister  dared  not  commit  himself  in  recommending  the  rejection  of 


54 

a  contract  that  the  President  and  he  had  worked  out  and  signed  jointly. 
He  had  forcibly  to  stand  by  it  and,  as  a  matter  of  fact,  did  make  a  luke- 
warm sort  of  a  defense. 

To  determine  the  issue,  Congress  finally  requested  the  Government  to 
have  all  of  the  competitors  present  their  offers  in  writing  within  a  reason- 
able length  of  time,  the  American  group  to  be  given  an  opportunity  of  bid- 
ding against  them.  This  was  done  and,  as  a  result,  the  writer  was  forced 
to  materially  increase  the  royalties  payable  to  the  State  and  add  a  great 
many  advantages  to  the  latter  which  had  not  been  anticipated. 

During  this  whole  period  the  press  had  commented  upon  the  situation 
very  prominently.  A  strong  popular  sentiment  had  arisen  against  Gon- 
zalez' mysterious  stand.  Costa  Ricans  have  always  prided  themselves  of 
their  sincerity,  honesty  and  fair  play  in  dealings,  especially  with  foreigners. 
There  had  never  been  a  diplomatic  claim  against  the  country,  and  the  word 
of  their  Executive  had  always  been  considered  as  final  and  binding.  Gon- 
zalez was  deliberately  destroying  this  noble  tradition  and  the  thinking  and 
leading  elements  in  the  country  rebelled  at  the  thought.  "  El  Imparcial," 
the  pro-German  Government  organ,  took  up  the  President's  side ;  the  pro- 
Ally  independent  dailies,  "  La  Informacion  "  and  "  La  Prensa  Libre,"  and 
the  comic  weekly  "  La  Linterna  "  defended  the  writer's  cause.  Between 
half  a  million  and  a  million  words  were  devoted  to  the  issue,  which  shows 
the  importance  it  was  given.  This,  and  the  fact  that  over  a  thousand 
Costa  Ricans  had  their  oil  lands  under  lease  to  Gonzalez'  victim-to-be,  prob- 
ably accounts  for  the  fact  that  the  President's  majority  in  Congress  was 
gradually  slipping  away  from  him.  Finally,  on  August  12,  1916,  Don 
Alfredo  met  his  Waterloo,  the  American  concession  being  approved  by  a 
vote  of  twenty-six  against  fifteen.  Even  the  pro-German  paper  had  to  admit 
the  finality  of  the  American  victory  and  announced  in  large  headlines : 

"  The  Pinto-Greulich  contract  for  the  exploitation  of  oil  in 
Costa  Rica  was  definitely  approved  yesterday." 

This  should  logically  have  ended  the  matter,  but  the  I^aiser's  troops 
were  still  victorious  on  all  fronts — and  the  unexpected  happened.  President 
Gonzalez  proceeded  to  sustain  a  novel  constitutional  theory  worked  out  by 
statesman  Dieguez. 

"  The  presidential  functions  are  dual,"  he  alleged,  "  that  of 
*  President  Administrator '  and  that  of  '  President  Co-Legislator.' 
When  I  signed  the  Greulich  contract  it  was  as  '  President  Adminis- 
trator.' Now  I  have  the  right  to  veto  my  own  signature  as  '  Presi- 
dent Co-Legislator ! ' " 

And  the  amazing  part  of  it  was  that  he  had  the  courage  to  do  it. 
However,  this  new  doctrine  was  so  absurd  and  repulsive  to  the  sterling 


55 

honesty  of  Costa  Ricans  that  an  ahnost  unanimous  feeHng  arose  against  such 
cheapening  of  the  presidential  word  and  signature.  So  strong  was  this 
sentiment  that  Gonzalez'  own  Minister  of  Public  Works,  whose  signature 
was  also  affixed  to  the  concession,  refused  to  sign  the  veto.  Under  the 
Costa  Rican  constitution  a  veto  being  null  and  void  unless  the  respective 
Minister  countersigns  it,  Congress  held  that  this  veto  could  produce  no 
legal  effect.  An  intense  juridic  controversy  resulted.  The  legal  elite 
described  before  was  once  more  consulted  and  again  the  prominent  jurists 
comprising  it,  unanimously  proclaimed  the  veto  to  be  illegal  and  the  con- 
cession as  an  irrevocable  and  valid  law  of  the  country. 

So  intense  had  public  sentiment  against  the  Executive  then  become 
that  he  thought  of  resigning.  His  German  coterie,  however,  opposed  this 
step  and  he  had  to  hold  out,  considering  at  the  same  time  the  advisability 
of  proclaiming  himself  Dictator.  Were  the  Huns  not  making  daily  progress 
toward  Paris,  Petrograd  and  Venice? 

Castro  Quesada,  Gonzalez'  Minister  in  Washington,  wrote  the  Presi- 
dent from  Allenhurst,  New  Jersey,  on  August  25,  1916,  a  letter  containing 
the  following  interesting  comment  and  advice  on  the  subject: 

"  *  *  *  Nicholas  says  *  *  *  ^j-ja^^  yQ^  ^re  so  downcast, 
so  tired,  so  sick  of  all  those  miseries  that  you  are  thinking  of  aban- 
doning the  Presidency,  if  the  matter  fails  *  *  *  Pelico  (nick- 
name for  Federico  Tinoco,  then  Minister  of  War)  writes  me  in  a 
tone  of  despair  and  sadness,  which  really  worries  me  because  it  is 
so  unusual  and  so  foreign  to  his  energetic  and  aggressive  character. 
He  says  nothing  concrete,  but  simply  that  everything  seems  so  black 
to  him,  so  ugly,  that  he  feels  like  running  away. 

"Anyhow,  write  me,  telling  me  whether  those  rumors  are  true 
and  whether  your  depression  is  so  great  that  you  intend  to  resign. 
This  worries  me  more  than  anything  else  because  it  would  mean  the 
definite  delivery  of  the  country  to  the  shamelessness  of  the  '  Ring ' 
(this  is  a  nickname  for  the  political  party  of  former  President  Cleto 
Gonzalez  and  other  prominent  intellectuals). 

'*  You  may  perhaps  say  that  sad  experience  authorizes  you  to 
qualify  our  group  as  no  less  incapable  and  disastrous  than  the  other 
groups  which  have  governed  us,  and  that,  if  you  did  take  that  step, 
you  would  have  every  reason  for  so  doing.  But  you  must  not  forget 
that  our  group,  of  as  ill  repute  as  it  may  he,  is  our  group.  Anyhow, 
inasmuch  as  it  is  all  one  trash,  it  is  much  better  that  our  group  rather 
than  the  others  divide  the  bacon.     *     *     *  " 

On  September  19,  1916,  he  wrote  the  President  as  follows : 

»  *  *  a:  -phe  newspapers  received  this  morning  gave  me  an 
accurate  idea  of  the  conflict  between  Maximo  (President  of  Con- 
gress) and  yourself  regarding  the  Greulich  contract.     *     *     * 


*  56 

<<  *  *  *  The  cable  which  Valentine  showed  me  said  that 
Congress  had  declared  that  your  veto  to  the  contract  was  void,  it 
being  contrary  to  Article  108  of  the  Constitution  and  that,  therefore, 
the  contract  is  already  a  law  of  the  Republic. 

"  Moreover,  a  person,  whose  name  I  cannot  give  you  because 
he  spoke  in  strict  confidence,  showed  me  a  cable  saying  more  or 
less,  '  *  *  *  All  the  ex-presidents  declare  emphatically  that  they 
sustain  Maximo  Fernandes  (President  of  Congress),  that  thirty-two 
deputies  are  with  him  unconditionally,  as  well  as  the  Republican 
party.     *     *     * ' 

"  You  can  imagine  the  impression  this  produced  upon  me. 
*  *  *  Of  course,  whilst  I  am  in  this  post  I  can  take  no  part  in 
politics,  especially  not  against  the  Government.     *     *     * 

«  *  *  *  J  j^Q^  want  to  give  you  my  impression  concerning 
the  business. 

"  If  the  majority  of  Congress  deem  the  attitude  of  Don  Maximo 
(President  of  Congress)  correct,  and  such  respectable  jurists  as  the 
former  presidents  consider  it  likewise,  you  should,  in  my  opinion, 
give  in.  Otherwise  it  would  mean  a  dictatorship  with  all  its  lament- 
able consequences,  aggravated  in  this  case  by  an  international 
problem,,  inasmuch  as  Americans  are  concerned  whom  Congress  and 
the  thinking  part  of  the  country  consider  as  holding  legally  acquired 
rights. 

"  It  was  an  earthquake,  which  did  us  much  harm  and,  therefore, 
obliges  us  to  preserve  and  improve  what  remains  to  us.  Let  the 
disaster  at  least  be  useful  to  us,  so  that  on  other  occasions  we  may 
proceed  with  more  caution  and  discretion. 

"  Yes,  Alfredo,  this  matter  was  lost  through  the  very  bad  manner 
in  which  it  was  handled.  You  were  stubborn  in  refusing  to  recognize 
the  strong  basis  protecting  Greulich  and  refused  to  accept  the  com- 
promise which  reduced  the  damage  to  one-fifth.  This  is  not 
g^lj  *  5)<  5K  Then,  in  spite  of  the  fact  that  you  knew  that  your 
majority  in  Congress  was  pasted  with  saliva,  when  the  moment 
arrived  for  you  to  speak  frankly,  to  employ  the  moral  authority, 
which  the  Government  as  such  would  have  exercised  over  timid  and 
vacillating  friends,  you  sent  Enrique  (The  Minister  of  Public  Works) 
to  Congress  to  say  nothing — the  diagnosis  of  the  doctors'  of  the 
King  who  was  crazy,  the  advice  of  Toledo  to  his  son :  *  Marry ;  do 
not  marry.' 

"  Then  happened  what  did  happen.  You  had  to  lift  the  cathedral 
alone,  with  wonderful  courage,  but  a  damned  detail  of  form,  im- 
possible to  save  because  other  interests  entered  into  the  game,  tore 
down  your  titanic  effort  of  the  last  hour. 


57 

"  *  *  *  And  now,  my  dear  Alfredo,  let  us  give  each  other  a  hug 
to  console  ourselves  mutually ;  you,  on  the  shock  which  your  patriotic 
sentiments  and  vanity  as  man  and  Governor  have  received  by  the 
sending  of  this  unfortunate  matter  and  I — on  what  I  shall  tell  you 
another  time/* 

Gonzalez  was  stubborn,  however,  and  influenced  by  his  pro-German 
advisors.  Give  in  to  Americans?  Never!  But  his  Washington  Minister 
was  of  a  different  opinion  and  wrote  him  on  October  1st,  1916,  urging 
him  again  to  bow  down : 

"  From  the  newspapers  which  I  received  last  week,  I  see  that 
some  people  are  very  desirous  for  a  friendly  settlement  and  that 
would  really  be  the  desideratum.  With  a  little  trickery  it  would, 
perhaps,  be  possible  to  have  Greulich  accept  the  compromise  which 
I  left  in  good  shape,  and  whereby  he  would  only  receive  Talamanca. 
To  attain  this  end,  it  would  be  necessary  to  secure,  or  make  the  bluff 
of  having  secured,  enough  deputies  who,  as  Congress,  might  declare 
that  your  veto  is  valid.  But  the  legal  question  would  then  come  up 
before  the  Courts.  It  is  precisely  before  that  discussion  would  come 
up  that  I  think  the  compromise  would  fit  in, 

"  I  think  that,  otherwise,  the  thing  to  be  done  is  what  I  stated 
in  my  foregoing  letter:  Give  in  on  the  petroleum  in  exchange  for 
a  formal  promise  to  back  the  tax  reforms.     *     *     * 

"  I,  of  course,  would  remain  with  the  Government  or,  rather, 
follow  the  Government,  provided  the  latter  remains  within  constitu- 
tional bounds ;  because  the  only  thing  which  would  make  me  separate 
therefrom  would  be  a  dictatorship  if  that  should  unfortunately 
happen.     *     *     * " 

There  was  only  one  road  open  for  Gonzalez  to  win  the  issue,  and  that 
was  to  proclaim  himself  Dictator.  This  idea  had  probably  been  in  the 
President's  mind,  judging  from  Castro  Quesada's  letters.  However,  the 
insistance  of  his  Washington  Minister  and  friend  finally  seemed  to  have 
the  desired  effect  and,  on  October  29th,  1916,  there  appeared  in  Official 
Gazette  No.  101,  a  decree  calling  Congress  into  special  session  to  pass, 
among  other  things,  upon  the 

"  Veto  of  the  Executive  power  to  the  law  approving  the  Pinto- 
Greulich  contract." 

In  his  message  to  Congress,  as  per  Official  Gazette  No.  44,  the  President 
said : 

"  If,  contrary  to  my  hope,  Congress  determines  to  reject  this 
initiative  and  constitutionally  ratifies  decree  No.  51,  I  shall  have  it 
executed  in  respectful  obedience  to  its  resolutions." 


58 


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59 


PRESIDENT    GONZALEZ    IS    ADVISED    BY    HIS    WASHINGTON 

MINISTER  TO  ABSTAIN  FROM  BECOMING  A  DICTATOR 

AND   TO  RESPECT  THE  LEGITIMATE  RIGHTS   OF 

THE  AMERICAN  OIL  GROUP. 

From  confidential  correspondence  between  Manuel  Castro  Quesada, 
Gonzalez'  Minister  Plenipotentiary  in  Washington,  and  the  President: 

"his  childishness  I  thought  it  was  my  duty  to  tell  you,  I  now  want 
to  give  you  my  impressions  concerning  the  business. 

"If  the  majority  of  Congress  deem  the  attitude  of  Don  Maximo 
correct  and  such  respectable  jurists  as  the  former  Presidents  consider 
it  likewise,  you  should,  in  my  opinion,  give  in.  Otherwise  it  would 
be  the  dictatorship  with  all  its  lamentable  consequences  aggravated 
in  this  case  by  an  international  problem,  inasmuch  as  Americans  are 
concerned  whom  Congress  and  the  thinking  part  of  the  country  con- 
sider as  holding  legally  acquired  rights. 

"  That  the  interests  of  the  country  are  prejudiced  if  the  GreuHch 
contract  remains  in  force?  What  are  we  going  to  do  about  it;  let 
them  be  prejudiced  there  being  no  other  remedy.  Let  us  try  to 
improve  them  in  other  ways  and  not  think  any  more  about  it.  It  was 
an  earthquake  which  did  us  much  harm  and,  therefore,  obliges  us  to 
preserve  and  improve  what  remains  to  us.  Let  the  disaster  at  least 
be  useful  to  us,  so  that  on  another  occasion  we  may  proceed  with 
more  caution  and  discretion. 

"  Yes,  Alfredo ;  this  matter  was  lost  through  the  very  bad  manner 
in  which  it  was  handled ;  you  "     *     *     ^h 

The  above  is  part  of  a  handwritten  letter  from  Allenhurst,  New  Jersey, 
summer  residence  of  the  Legation,  on  September  19,  1916,  consisting  of  six 
pages.  It  will  be  seen  therefrom  that  Gonzalez'  own  clique  considered  the 
American  group  as  the  legitimate  owner  of  the  grant  with  the  approval  of 
the  ex-presidents,  prominent  lawyers,  the  Legislature  and  the  thinking  ele- 
ments of  Costa  Rica.  International  complications  are  foreseen,  should 
Gonzalez  continue  his  stubborn  and  peculiar  opposition.  The  above  letter 
was  written  about  a  month  after  the  President  had  repudiated  his  own 
signature. 


60 

By  "  this  initiative  "  he  referred  to  his  veto.  "  Decree  No.  51  "  v^as  the 
one  legislatively  ratifying  the  Greulich  oil  concession. 

The  so-called  veto  w^as  thereupon  exhaustively  discussed,  referred  to 
a  special  committee  and  rejected.  So  strong  v^as  the  feeling  of  all  parties 
on  the  subject  that  out  of  the  forty-three  deputies  constituting  Congress, 
only  four  voted  in  the  President's  favor. 

That  ended  the  fight  and,  w^ithout  further  opposition  on  Gonzalez'  part, 
Official  Gazette  No.  113,  of  November  12th,  1916,  published  the  American 
grant  with  the  following  resolution: 

"  The  Constitutional  Congress  of  the  Republic  of  Costa  Rica, 
in  its  session  of  November  10th,  1916,  decreed  by  more  than  the  ma- 
jority of  two-thirds  required  by  the  Political  Constitution  to  cause 
to  be  promulgated  in  the  Gazette,  Official  Daily,  the  foreging  decree 
for  its  effects  as  Law  of  the  Republic." 

The  writer  was  in  New  York  at  the  time.  Upon  receiving  the  cable 
announcing  that  the  Legislature  had  decided  in  his  group's  favor,  it  was 
apparent  to  him  that  all  troubles  were  over  and  that,  as  a  good  sportsman, 
the  time  was  ripe  for  handshaking  all  around,  with  friends  and  enemies 
alike.  Consequently,  he  sent  the  following  cable  to  his  representative  in 
Costa  Rica,  on  November  11th,  1916: 

"  Last  and  sincere  congratulations.  Please  express  to  President 
of  Costa  Rica  my  cordial  appreciation,  friendly  regards  and,  with  my 
best  wishes,  my  trust  that  the  enterprise  will  redound  to  the  greatest 
benefit  of  your  dear  and  progressive  country." 

Gonzalez  replied  to  that  representative,  thanking  the  author  and  return- 
ing equally  cordial  wishes.. 

On  December  23d,  1916,  the  writer  entered  into  a  contract  with  impor- 
tant American  oil  interests  for  the  exploitation  of  the  enterprise  on  a  large 
scale.  Work  was  commenced  at  once  on  the  development  of  the  properties 
under  the  concession ;  very  large  investments  were  made  and,  at  this. writing, 
drilling  operations  in  various  places  are  being  carried  on  day  and  night. 

The  author  did  not  return  to  Costa  Rica  for  some  months,  devoting  his 
time  to  the  organization  of  the  work.  His  surprise  was  great  when,  on  Jan- 
uary 29th,  1917,  he  received  a  cable  announcing  that  President  Gonzalez  had 
been  overthrown  and  Federico  Tinoco,  the  Minister  of  War,  assumed  the 
Provisional  Presidency. 

This  news  was  unwelcome  because  Mr.  Tinoco  had  never  been  con- 
sidered a  friend  of  the  oil  enterprise.  Therefore  a  cable  was  sent  at  once 
to  the  Costa  Rica  representative,  instructing  him  to  establish  in  the  writer's 
name  friendly  relations  with  the  new  Government.  There  was  no  reason  to 
fear  that  Tinoco,  or  any  other  new  Government,  could  in  any  way  interfere 


61 

with  the  concession,  which  was  not  only  binding  on  the  Government  but  on 
the  State  itself.  However,  the  recently  acquired  experience  in  fighting  the 
opposition  of  a  Central  American  Government  did  not  create  a  particularly 
strong  desire  for  entering  into  a  new  contest  of  the  same  sort.  Great  relief 
was  felt,  therefore,  when  the  new  President  replied  to  the  overtures  in  an 
equally  friendly  spirit. 

Time  went  on.  The  author  visited  Costa  Rica  and  other  Latin-Amer- 
ican countries,  devoting  his  whole  energy  to  the  acquisition  of  new  oil  fields, 
their  organization  and  development.  Little  of  his  time  was  spent  in  Costa 
Rica  and  he  certainly  had  no  interest  whatever  in  its  political  situation.  One 
occasion  should  be  excepted,  though,  and  that  was  immediately  after  the 
United  States  had  declared  war  on  Germany,  when  he  took  it  upon  himself 
to  suggest  by  cable  to  the  Tinoco  Government  that  it,  too,  declare  war  on  the 
Hun.  Some  of  the  Latin- American  States  had  done  so.  Costa  Rica  was 
vacillating.  A  strong  current  of  popular  feeling  was  for  it,  but  the  German 
elements  were  intriguing  against  it  and  Tinoco  was  endeavoring  to  counter- 
act their  schemes  in  order  to  gain  wide  support  for  the  war  decree.  Presi- 
dent Wilson's  refusal  to  recognize  the  Tinoco  Government  was  being  keenly 
felt  by  foreigners  and  natives  alike.  In  the  belief  that  the  United  States 
could  not  very  well  refuse  to  have  a  friendly  feehng  for  a  Government  that 
had  frankly  allied  itself  with  ours  in  fighting  a  common  enemy,  the  writer 
sent  the  following  cable  to  a  friend  of  his  and  of  President  Tinoco  in  Costa 
Rica  on  April  11th,  1917: 

"  I  suggest  to  you  that  Costa  Rica  follow  the  attitude  of  Panama 
and  Cuba  by  declaring  immediate  war  on  Germany,  because  I  know 
positively  that  Costa  Rica  is  being  considered  as  the  principal  center 
of  German  conspiracy.  With  a  full  knowledge  of  the  matter  I  con- 
sider the  recognition  of  Tinoco  impossible  if  he  does  not  take  rapid 
and  decisive  "action." 

Relations  with  Germany  were  broken  off  a  few  months  later  and  war 
declared  not  long  thereafter. 


62 


63 


"A  LITTLE  TRICKERY"  IS  PROPOSED  TO  DEPRIVE  AMERICAN 
OIL  GROUP  OF  ITS  RIGHTS. 

(From    Confidential    Correspondence    between    Manuel    Castro    Quesada, 
Minister  Plenipotentiary  in  Washington,  and  President  Gonzalez.) 

''  Washington,  October  1,  1916. 
"  My  Dear  Alfredo  : 

"  I  have  been  greatly  worried  over  the  difficulties  in  which  you 
have  been  placed  by  the  impulsive  action  of  Don  Maximo.  If  the 
matter  reduced  itself  to  his  separation  alone,  it  would  not  matter ;  but 
what  I  fear  is  that  the  Congressmen  accompanying  him  are  suffi- 
ciently numerous  to  leave  you  without  a  majority,  that  is  to  say, 
drown  your  projects. 

''  From  the  newspapers  which  I  received  last  week,  I  see  that 
some  people  are  very  desirous  for  a  friendly  settlement  and  that 
would  really  be  the  desideratum.  With  a  little  trickery  it  would  per- 
haps be  possible  to  have  Greulich  accept  the  compromise  which  I  left 
in  good  shape  and  whereby  he  would  only  receive  Talamanca.  To 
attain  that  end,  it  would  be  necessary  to  secure  or  make  the  bluff  of 
having  secured  enough  Congressmen  who,  as  Congress,  may  declare 
that  your  veto  is  valid.  But  the  legal  question  would  then  come  up 
before  the "     *     *     * 

The  above  letter  was  written  after  the  time  the  American  oil  grant 
had  been  approved  by  the  Legislature  and  vetoed  by  the  President,  despite 
his  previously  affixed  signature.  Ganzalez  and  his  Washington  Minister 
were  sure  that  Congress  would  reject  the  veto.  Bluff  and  trickery  were 
therefore  proposed  in  an  attempt  to  make  the  American  interests  feel 
insecure. 


64 


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65 


ALFRED   GONZALEZ,   OUSTED,   ENLISTS    PRESIDENT 
WILSON'S  AID. 

How   Gonzalez   Touched   Our   President's   Sentimental   Chord  and 

Obtained  His  Support. 

The  overthrow  of  Gonzalez  was  a  simple  affair.  He  having  declared  his 
intention  to  retain  the  presidency  for  another  term,  Tinoco  insisted  that 
the  unruly  ruler  keep  his  word  and  abstain  from  forcing  himself  upon  the 
unwilling  people.  In  reply,  the  President  requested  Tinoco,  then  Minister 
of  War,  to  resign.  Being  in  charge  of  the  armed  forces  of  the  country, 
numbering  about  500  men,  Tinoco  informed  Gonzalez  that  the  latter's  use- 
fulness was  at  an  end.  The  President  knew  that  his  minister  meant  business 
and  speedily  transferred  his  residence  to  the  American  Legation,  where,  on 
the  plea  that  his  life  was  in  danger,  he  received  asylum. 

There  was  no  bloodshed  and  hardly  any  excitement.  The  peaceful 
coup  d'  etat  had  occurred  in  the  morning.  At  noon,  the  capital  was 
beflagged ;  the  cafes  were  wide  open ;  bands  played  merrily  and  a  celebration 
took  place  paralleled  only  on  Armistice  Day. 

Tinoco  assumed  the  provisional  presidency  but,  faithful  to  his  guardian- 
ship over  the  1914  pacts  between  the  combined  political  parties,  at  once 
called  the  ex-Presidents  and  other  prominent  men  into  consultation.  After 
the  rejoicing  over  the  fall  of  the  unpopular  would-be  despot  had  subsided, 
it  was  found  that  general  political  harmony  prevailed.  Everybody  seemed 
to  be  satisfied  with  the  new  provisional  regime,  which  became  permanent 
a  few  months  later  as  the  result  of  elections  under  the  direct  supervision 
of  the  former  presidents. 

Gonzalez  was  permitted  to  leave  for  Washington  in  company  with  his 
friend  Castro  Quesada,  who  had  acted  as  his  Minister  to  the  United  States. 
Upon  their  arrival  at  our  national  capital,  the  unforeseen  happened.  Presi- 
dent Wilson  received  both  men  with  official  honors,  Gonzalez  being  given 
an  opportunity  to  empty  his  heart  to  our  Chief  Magistrate. 

"  This,  Mr.  President,"  he  is  reported  as  having  pleaded,  "  is  a 
recurrence  of  a  typical  Central  American  revolution.  I  trusted  my 
War  Minister,  Tinoco,  whom  I  considered  a  friend  and  into  whose 
hand  I  had,  therefore,  delivered  my  armed  forces.  Impelled  by  a 
crazy  lust  for  power,  he  betrayed  me  outrageously  and  has  now  the 
country  under  his  control  as  a  tyrant.  Unless  you  help  me  to  over- 
throw his  regime,  my  country  will  face  ruin.  My  administration 
was  highly  successful,  as  I  tried  in  a  modest  way  to  emulate  your 
great  example  in  economic  and  state  matters.     Help  me!" 


(A 

President  Wilson  seems  to  have  been  deeply  impressed  by  the  deposed 
ruler's  apparent  charm  and  frankness  and,  shortly  after  his  visit,  the  State 
Department  made  the  following  announcement: 

''  In  order  that  citizens  of  the  United  States  may  have  definite 
information  as  to  the  position  of  this  Government  in  regard  to  any 
financial  aid  which  they  may  give  to,  or  any  business  transactions 
which  they  may  have  with,  those  persons  who  overthrew  the  con- 
stitutional Government  of  Costa  Rica  by  an  act  of  armed  rebellion, 
the  Governrnent  of  the  United  States  desires  to  advise  them  that 
it  will  not  consider  any  claims  which  may  in  the  future  arise  from 
such  dealings  as  worthy  of  its  diplomatic  support." 

That  was  in  February,  1917,  only  a  few  weeks  after  -the  coup  d'  etat, 
when  there  had  hardly  been  time  for  our  Government,  with  its  slow- 
working  routine,  to  thoroughly  investigate.  It  is  therefore  safe  to  assume 
that  President  Wilson  acted  upon  the  impulse  of  the  moment,  solely  with 
Gonzalez'  own  presentation  of  the  case  and  a  mere  general  official  report 
before  him.  It  stands  to  reason  that  he  was  unacquainted  with  the  pro- 
German  nature  of  Don  Alfredo's  administration,  although  the  files  of  our 
various  government  departments  must  have  contained  the  information  given 
in  this  report.  We  were  then  on  the  verge  of  declaring  war  on  the  Hun 
and,  under  the  circumstances,  the  ousting  of  a  dangerous  pro-German 
government  close  to  the  Panama  Canal,  with  the  general  applause  of  the 
country  affected,  could  not  be  classed  as  an  infringement  upon  our  Presi- 
dent's idealistic  policy  of  stamping  out  revolutions  in  Latin  America.  This 
change  of  government  would  fit  much  more  accurately  into  the  doctrine 
of :  "a  government  of  the  people,  for  the  people,"  or,  as  Wilson  terms  it, 
"  self  determination." 

Gonzalez  and  his  clique  have  made  the  open  claim  that  President 
Wilson  promised  to  oust  Tinoco,  by  force  if  necessary,  and  permit  the 
deposed  faction  to  regain  the  control  of  Costa  Rica.  Our  Government's 
Costa  Rican  policy  since  the  Gonzalez  overthrow,  intercepted  correspond- 
ence and  subsequent  events  apparently  corroborate  this  version.  The  Ger- 
man agent,  Kiimpel,  for  instance,  was  so  informed,  in  a  letter  which 
Gonzalez  wrote  him  after  his  interview  at  the  White  House.  In  an  efifort 
to  exterminate  Hun  activities  from  his  country.  Provisional  President 
Tinoco  had  forced  "  El  Imparcial,"  the  German  propaganda  paper  to  sus- 
pend its  publication,  and  arrested  numerous  Huns,  among  them  Kiimpel. 
Upon  being  examined  (in  the  presence  of  the  American  Vice-Consul,  Mr. 
Fitzpatrick),  this  Teuton  agent  testified: 

"  Judge — Kindly  tell  me  why  you  have  said  to  some  of  your 
workmen  and  to  some  people  in  Grecia  that  Alfredo  Gonzalez  would 
soon  return  to  power? 

"  Witness — For  no  reason,  because  I  never  said  anything  like  it. 


67 

Whoever  says  so  is  a  liar,  and  whoever  pays  any  attention  to  such 
tales  in  order  to  trouble  quiet  people  is  a  fool.  How  could  I  pos- 
sibly have  made  such  a  statement!  /  am  morally  certain  that,  if 
Alfredo  Gonzalez  so  desired,  he  would  now  be  President  of  Costa 
Rica,  because  Mr.  Wilson,  of  whom  he  never  asked  such  a  thing  as 
is  being  said  here,  called  him  especially  for  the  purpose  of  offering 
him  his  restitution  to  power  by  force.  Although  I  have  no  details, 
the  intimacy  and  constant  communication  of  ideas  between  us, 
which  we  have  had  for  riiany,  many  years,  permits  me  to  under- 
stand his  motives  which  cannot  be  other  than  a  legitimate  personal 
pride — which  prevents  him  from  converting  himself  into  a  lackey 
of  the  Department  of  State — and  his  patriotism  as  a  Costa  Rican 
who  does  not  want  to  see  his  country  in  the  sad  position  of  Cuba, 
Panama  and  Nicaragua.  And  it  would  only  be  with  the  backing  of 
American  arms  that  a  revolution  in  this  country  could  hope  to  be 
successful,  because  there  seems  to  be  an  entire  lack  of  men  capable 
of  exposing  their,  hide  for  their  convictions. 

"  Judge — The  foregoing  statements  which  you  have  made  with 
reference  to  the  fact  that  Mr.  Wilson  has  offered  to  replace  Mr. 
Alfredo  Gonzalez  in  power,  do  you  know  them  from  your  own 
knowledge  or  from  hearsay? 

"  Witness — I  know  them  from  my  own  knowledge,  through  a 
personal  letter  from  Alfredo  Gonzalez. 

"  The  examination  is  suspended  here — witness  adding  that  he 
has  received  two  letters  from  Alfredo  Gonzalez,  which  fact  he  desires 
to  state  so  that  everything  may  be  cleared  at  once  and  nothing  remain 
for  possible  misunderstanding  and  consequent  future  trouble.     The 
two  letters  were  received  by  him  directly  by  mail  from  the  United 
States — one  sent  from  Philadelphia,  the  other  from  another  interior 
town"  (from  official  record). 
Gonzalez  felt  certain  that  the  United  States  Government  would  back 
his   endeavors   to   oust   the   Tinoco   regime.     This   is   shown   in   detective 
reports  made  during  the  years  1917  and  1918.    The  following  extracts  there- 
from are  interesting: 

"April  8,  1917.  The  main  subject  (Gonzalez)  was  taken  in 
hana  on  this  day.  Together  with  several  companions  he  left  the 
house  about  9 :00  a.  m.,  carrying  a  small  valise  marked  AGG-TH.  To 
all  appearances  this  seemed  to  be  a  precious  package  for  him,  because 
at  no  time  while  we  were  with  him  did  he  leave  it  out  of  his  sight 
nor  allow  anyone  to  touch  it.  Accompanied  by  a  man,  to  all  appear- 
ances German;  tall,  heavy  set,  weighing  about  200  pounds,  with 
ruddy  complexion,  and  another  man  rather  heavy  set  and  under- 
sized. 


68 

"  The  taller  man  (German)  bought  a  German  paper,  taking  the 
Broadway  car  to  59th  Street  and  then  the  crosstown  car  to  Madison 
avenue,  where  he  entered  the  building  on  the  northwest  corner  called 
the  '  Hoffman  Arms,'  where  he  remained  some  time,  and  after  com- 
ing out  returned  to  71st  street     *     *     * 

**  April  9,  1917  *  *  *  About  11  a.  m.  he  left  the  house 
ao-ain  with  the  same  German.  Both  in  most  earnest  conversation. 
The  German  left  him  at  the  22d  Street  Subway  station,  one  of  our 
men  being  with  him  all  the  time. 

"  The  principal  was  met  by  (J.  Montero,  former  Consul  General 
of  Costa  Rica),  a  short,  thick  set  man,  who  was  evidently  of  the 
Latin  race,  wearing  gold  eye-glasses  with  whom  he  returned  to  his 
room.  From  our  house  we  could  see  that  they  were  in  close  con- 
ference for  several  hours. 

"  A  short  heavy  set  man,  somewhat  blondish  and  pock-marked, 
entered  the  house  about  an  hour  after  the  return  of  the  foregoing, 
and  was  immediately  taken  to  their  rooms.  He  seemed  to  be  a  very 
quick  talker  and  gesticulator.  He  was  not  a  Latin  and  gave  every 
evidence  of  being  German     *     *     * 

"  April  10,  1917.  At  9  a.  m.  our  principal,  together  with  the 
German,  left  the  house  and  went  to  the  same  restaurant  for  break- 
fast, where  they  remained  for  about  an  hour.  On  coming  out  of  the 
restaurant  they  separated,  the  German  again  taking  the  Subway,  one 
of  our  men  being  with  him  all  the  time.  He  then  got  out  at  Battery 
Place  and  entered  No.  11  Broadway,  and  the  last  we  saw  of  him  he 
was  going  into  the  Steamship  Line's  office. 

"  The  principal  (Gonzalez)  on  returning  to  his  house  was  met 
again  in  the  street  by  the  man  with  the  gold  eye-glasses  (Montero). 
They  entered  the  house,  were  in  conversation  for  half  an  hour,  vv^hen 
the  younger  man  left  precipitately. 

"  Considering  him  as  an  important  element,  we  left  our  assist- 
ants to  guard  the  house,  and  took  this  man  in  hand  ourselves.  We 
followed  him  into  the  Subway.  He  again  got  out  at  Rector  Street; 
we  kept  close  to  him  until  he  entered  No.  2  Rector  street.  We 
went  up  in  the  elevator  with  him  to  the  11th  floor,  where  he  entered 
'the  room  with  the  sign  'Consulate  General  of  Costa  Rica.'  We 
noticed  in  the  inner  office  there  was  quite  a  crowd  of  young  Latins, 
numbering  between  15  and  18,  while  out  in  the  hall  there  were 
half  a  dozen  waiting  to  enter.  There  was  a  woman  in  the  inner 
room,  evidently  connected  with  the  office. 

"  Realizing  we  had  found  something  important,  we  immedi- 
ately telephoned  for  three  more  assistants.  In  the  meanwhile  we 
entered  the  office,  asked  for  the  Consul  General  himself,  and  the 
same  gentleman  with  the  gold  eye-glasses  came  out  and  introduced 


69 

himself  as  Mr.  Montero,  claiming  he  was  the  Consul  General,  and 
asked  our  business.  We  presented  our  card  as  the  representative  of 
a  newspaper  organization  desiring  information  on  the  status  of  his 
country,  requesting  him  to  give  us  such  data  as  he  cared  to  give  and 
that  we  wished  to  publish  in  our  papers  whatever  might  be  of  in- 
terest. 

"  As  we  represented  ourselves  as  newspaper  men,  he  immedi- 
ately became  interested  by  telling  us  that  he  had  been  in  the  news- 
paper business  himself,  having  been  the  representative  of  the  New 
York  Herald  in  Costa  Rica  for  some  time. 

"  In  our  conversation  with  him  he  was  very  frank  in  saying  that 
a  change  in  government  had  taken  place  in  Costa  Rica,  and  that 
he  still  retained  his  post  as  Consul  General,  but  that  he  had  to  be 
very  discreet  because  he  was  a  friend  of  the  Ex-President  Alfredo 
Gonzalez,  who  is  now  in  New  York  living  on  West  71st  Street.  He 
was  very  frank  in  telling  us  that  he  could  not  compromise  himself  by 
making  any  statement  for  publication.  Nevertheless,  he  was  em- 
phatic in  his  statement  that  the  Ex-President  had  a  large  following 
and  was  taking  active  steps  against  the  present  government.  We  at 
once  made  up  our  mind  that  he  was  not  playing  true  to  his  official 
position,  and  therefore  we  are  holding  him  in  reserve  for  future 
use. 

"  He  gave  us  a  card  of  introduction  to  the  Ex-President,  telling 
us  that  he  had  important  documents  from  Washington  which  he 
thought  we  could  get  from  him  for  newspaper  usage. 

"  We  then  left  him  with  the  understanding  that  we  would  come 
together  again     *     *     * 

"April  11,  1917.  We  then  called  on  Gonzalez  and  presented 
the  introduction  given  us  by  Mr.  Montero.  Were  received  pleas- 
antly. We  found  him  a  most  affable  man  and  ready  to  talk  on  matters 
pertaining  to  his  country.  He  was  very  bitter  in  his  language  about 
Tinoco  and  his  associates  and  the  traitorism  that  they  had  played 
on  him.  He  was  also  most  bitter  at  all  Americans  and  American 
interests,  denouncing  them  in  every  way  as  alzvays  having  been  ene- 
mies to  his  government,  and  most  markedly  showing  that  if  he 
returned  to  power  they  would  find  no  quarters  with  his  government. 

"About  a  half  hour  after  beginning  our  conversation  with  the 
above  party,  the  same  German  entered  the  room  without  knocking, 
and,  on  receiving  a  sign  from  the  principal  that  he  was  busy,  he  im- 
mediately withdrew. 

"He  gave'  us  to  understand  by  his  interviews  with  the  State 
Department  that  the  present  government  would  never  be  recognized 
and  that  Washington  would  do  everything  possible  to  avoid  the  prog- 


70 

ress  of  the  Government.  He  told  us  that  business  was  at  six's  and 
seven's  in  Costa  Rica  and  going  backward  fast;  that  now  that  he 
was  out  he  had  no  intention  of  again  looking  for  the  presidency  for 
himself,  but  that  he  would  use  every  influence  for  the  present  govern- 
ment to  be  overthrown  and  an  acceptable  government  established. 

"  He  stated  that  he  was  making  preparations  to  return  to  Costa 
Rica  at  an  early  date  with  numerous  friends  and  that  he  did  not 
consider  it  necessary  to  use  force  of  arms,  but  that  through  his  many 
friendships  and  connections  he  would  be  able  to  proselyte  the  country 
to  such  an  extent  that  they  would  realize  the  traitorism  of  the  Tinoco 
government  and  would,  among  themselves  and  with  his  co-opera- 
tion, cause  a  counter-revolution  that  would  eliminate  Tinoco  and 
his  entire  staff.  He  handed  us  a  paper  (annex  A)  copy  of  which  is 
hereto  attached,  written  in  English,  which  seems  to  be  a  diatribe  of 
bitter  reminiscences. 

"  In  our  presence  he  wrote  an  article  in  Spanish,  translation  of 
which  is  hereto  attached  (annex  B),  which  seems  to  be  abusive  to 
the  existing  Government,  he  specifically  referred  to  some  clippings 
wherein  names  of  prominent  Americans  are  mentioned  and  referred 
to  them  as  gamblers  and  speculators  of  a  most  obnoxious  class  to 
the  country     *     *     * 

"April  11,  1917.  *  *  H=  ^YiQ  principal,  in  company  with  a 
young  man  carrying  a  camera,  came  out.  The  young  man  we  would 
jud^e  to  be  of  a  clerical  position  and  also  of  Latin  descent.  They 
boarded  the  Subway  at  77th  Street  and  left  at  Wall  Street,  where 
they  separated.  The  principal  (Gonzalez)  walked  down  to  Front 
street,  No.  80,  where  he  entered  the  Costa  Rican  Trading  Company's 
offices,  and  about  two  o'clock  came  out  with  three  men,  whom  we  had 
never  seen  before. 

"  The  first  was  a  young  man  about  5  ft.  tall  (Eduardo  Bonilla)  ; 
The  second,  a  very  large  man,  about  5  ft.  11,  smooth  shaven,  heavy 
built  (W.  H.  Field),  and  the  other  man  about  5  ft.  6Y2,  39  years 
of  age,  heavy  built,  about  180  pounds,  smooth  shaven  (Edmundo 
Montealegre).  They  all  went  to  a  restaurant  at  130  Water  Street 
and  reftiained  there  until  2.25  p.  m.,  and  the  principal,  with  two  of 
the  foregoing,  left  the  restaurant  and  returned  to  80  Front  Street. 

"April  11,  1917.  We  met  the  principal  at  the  Ansonia  Hotel 
at  6.30  p.  m.,  where  we  all  had  a  rather  ample  dinner.     *     *     * 

"  During  our  conversation  we  covered  many  points,  wherein  he 
showed  that  he  is  practically  a  maniac  on  the  one  subject  of  the 
elimination  of  Tinoco.  He  told  us  many  of  his  plans  for  re-establish- 
ing himself  in  Costa  Rica,  insisting  that  he  had  strength  enough  to 
proselyte,  and   did  not  require  arms   or   revolutionary   methods  to 


71 

gain  this  point.  He  felt  absolutely  sure  that  the  United  States  Gov- 
ernment was  so  firmly  set  against  Tinoco  that  he  could  have  its 
fullest  co-operation  in  carrying  out  his  plans. 

"  He  informed  us  that  his  personal  friend,  Castro  Quesada,  was 
moving  heaven  and  earth  in  Washington  to  get  this  co-operation, 
and  he  at  least  felt  absolutely  sure  that  this  man  was  working  most 
honestly  in  his  favor  and  for  the  culmination  of  all  his  plans.  We 
gave  him  a  copy  of  the  supposed  interview  that  we  were  to  publish. 
He  read  same  and  kept  the  copy,  as  he  said  he  wanted  to  study  it 
that  night  for  our  subsequent  engagement. 

"April  12,  1917.  We  called  on  the  gentleman  (Alfredo  Gon- 
zalez) at  10:30  a.  m.,  found  him  alone  and  with  our  interview  before 
him.  He  had  made  some  notations  thereon  and  some  changes,  but 
all  in  all  he  seemed  to  be  very  much  pleased  therewith. 

"  I  explained  to  him  that  on  account  of  voluminous  war  news 
it  might  be  several  days  before  we  could  publish  this  article,  and  we 
were  preparing  to  take  notes  for  the  second  article  of  the  serial  when 
a  man  entered  the  room,  about  5  ft.  11  in.  tall,  weighing  about  190 
pounds,  dark  blondish  hair,  smooth  face,  apparently  between  32  and 
35  years  of  age,  speaking  Spanish  fluently  (W.  H.  Field).  This  man 
gave  himself  considerable  importance  and  immediately  took  command. 
"  Our  principal  at  once  introduced  us  and  gave  him  our  copy 
of  the  interview.  He  hardly  looked  at  same  before  he  said  in  the 
most  imperative  manner: 

"  '  Cut  this  all  out ;  Mr.  Gonzalez  has  no  right  to  give  any 
interviews  and  has  no  right  to  appear  before  the  public  at  all. 
This  matter  is  entirely  in  the  hands  of  the  Department  of  Justice, 
and  although  I  may  be  committing  an  indiscretion  in  giving  you 
this  information,  the  fact  is  that  Mr.  Gonzalez  and  all  those  con- 
nected with  him  must  keep  their  mouths  shut  absolutely  until  given 
out  by  the  Department,  which  has  all  the  necessary  information  for 
carrying  out  the  projects  in  view.'  " 
The  foregoing  detective  report  would  indicate  that  the  following  are 
associated  with  Gonzalez : 

Costa  Rica  Trading  Company,  which  is  a  New  York  commercial 

concern ; 
Edmundo  Montealegre  and  Eduardo  Bonilla,  both  Costa  Ricans 

controlling  the  concern  named ; 
J.  Montero,  the  former  Costa  Rican  Consul  General ; 
Manuel   Castro   Quesada,   the    former   Costa    Rican   Minister   in 

Washington,  and 
W.  H.  Field,  who  has  made  himself  appear  as  being  connected 
with  the  New  York  Division  of  the  Department  of  Justice. 


72 

Montealegre  and  Bonilla  have  personal  reasons  for  being  enemies  of 
the  Tinoco  family.  Joaquin  Tinoco,  the  President's  brother,  killed  a  relative 
of  the  gentlemen  named  in  a  duel.  A  family  feud  v^as  the  consequence, 
which  has  become  a  sort  of  Sicilian  vendetta  affair. 

The  plan  seemed  to  be  for  Gonzalez  and  his  associates  to  finance  and 
organize  a  revolution  in  New  York  to  oust  the  Tinoco  regime  and  re-establish 
Gonzalez'  friends  in  power.  Everything  indicates  that  the  deposed  ruler 
and  his  group  were  convinced  that  the  State  Department  and  the  Depart- 
ment of  Justice  were  looking  with  favor  upon  the  scheme. 

Some  months  after  the  above  detective  report  was  filed,  a  revolution 
broke  out  in  Costa  Rica,  headed  by  Rogelio  Fernandez  Guell,  a  pro-German 
Spaniard,  who  had  for  many  years  resided  as  a  newspaper  editor  in  Mexico 
City.  Gonzalez  had  called  him  to  Costa  Rica  upon  assuming  the  presidency, 
and  made  him  part-owner  and  editor  of  "  El  Imparcial,"  the  pro-Hun  paper 
already  described.  The  revolt  was  unsuccessful,  Guell  and  his  companions 
being  killed  by  government  troops.  Their  bodies  were  taken  to  the  capital 
and  sumptuous  funeral  services  held,  the  whole  German  colony,  in  ceremo- 
nious attire,  marching  behind  the  cortege  to  the  distant  cemetery. 

In  the  meantime,  Tinoco  had  established  an  orderly  Administration 
and  resumed  diplomatic  relations  with  the  following  countries :  Brazil, 
Argentine,  Chile,  Peru,  Bolivia,  Ecuador,  Colombia,  Venezuela,  Mexico, 
Guatemala,  Honduras,  Salvador,  Santo  Domingo,  Haiti,  China,  Japan, 
Portugal,  Switzerland,  Spain,  Sweden,  Norway,  Denmark  and  the  Vatican. 
Great  Britain  and  France  maintained  friendly  relations  with  him,  but 
withheld  formal  recognition  out  of  respect  for  the  United  States.  Cuba, 
Panama  and  Nicaragua  were,  of  course,  guided  by  our  Government. 
Nevertheless,  when  Tinoco  declared  war  on  Germany  he  was  hailed  by 
Great  Britain,  France  and  the  other  entente  nations  as  a  welcome  ally 
against  the  Hun.  Even  American  Ambassador  Sharp,  in  Paris,  exchanged 
the  usual  formal  complimentary  letters  on  that  occasion  with  Tinoco's 
Minister  to  France. 

The  failure  of  the  Fernandez  Guell  revolution  did  not  seem  to  dis- 
hearten Gonzalez  and  his  satellites,  who  appeared  to  have  secured  fresh 
funds  in  the  United  States  with  which  to  fight  Tinoco  and  the  American 
interests.  The  inducement  offered  to  those  from  whom  his  group  tried  to 
obtain  money  for  the  intended  revolution  was  a  share  in  the  oil  concession 
discussed  in  this  booklet  which  an  important  American  corporation  is  now 
exploiting  on  a  large  scale,  and  against  which  it  was  decided  that  the  return- 
ing Gonzalez  faction  would  take  arbitrary  measures.  This  is  clearly  shown 
by  later  detective  reports,  of  which  the  following  extracts  are  pertinent: 

"  April  5,  1918.     *     *     *     I  left  and  went  to  2  Rector  Street, 
where  the  office  of  Montero  is  located.    As  I  was  about  to  enter  his 


73 

office  in  Room  903,  I  saw  a  man  whom  I  recognized  as  having  seen 
before  in  Room  376,  17  Battery  Place,  which  is  the  office  of  a  man 
by  the  name  of  R.  H.  Manser.  My  attention  was  at  once  drawn 
to  him  because  at  that  time  I  overheard  a  conversation  with  Manser 
regarding  the  purchase  of  a  boat  of  fast  speed  for  use  in  Costa  Rica. 
*  *  *  He  went  direct  to  80  Front  Street,  the  office  of  the  Costa 
Rica  Trading  Company.  Mr.  W.  H.  Field,  whom  I  know  well, 
seemed  to  be  waiting  anxiously  for  him,  because  he  grabbed  him  at 
once  and  addressed  him  as  *  Montealegre  '  and  rushed  him  to  the 
office.  I  waited  some  time,  and  at  6.30  p.  m.  they  came  out  with 
another  man  of  Spanish  appearance,  about  55  years  of  age,  with  short 
gray  moustache. 

"  April  6,  1918.  At  9.30  a.  m.  went  to  2  Rector  Street,  took 
elevator  to  ninth  floor,  but  found  Montero  had  moved  to  12th  floor, 
Room  1223.  When  I  covered  that  room  I  noticed  a  gathering  of 
10  or  12  men,  all  speaking  Spanish.  None  of  them  seemed  to  be  of 
importance  except  one,  whom  by  the  description  given  me  I  at  once 
recognized  as  Mr.  Ellis,  a  Mexican,  whose  office  is  at  35  Nassau 
Street,  and  who,  I  had  been  told,  was  interested  with  Montero.  I 
followed  him  to  his  office,  where  I  left  him.     *     *     * 

"April  8,  1918.  *  *  *  At  2  p.  m.  took  operator  J.  L.  to 
Montero's  office  with  instructions  to  offer  a  quantity  of  rifles.  A 
young  man  went  inside  and  returned  in  a  few  minutes,  saying  that 
Mr.  Montero  was  then  engaged  but  he  was  interested  in  buying  rifles 
and  requested  that  my  operator  return  in  a  few  days  with  a  definite 
offer.  He  wanted  a  description  of  the  rifles  and  all  the  data  to  give 
Mr.  Montero.  He  was  given  a  list  of  the  offer  and  showed  quite 
some  satisfaction  when  he  read  it. 

"  April  9,  1918.  *  *  *  At  10.30  a.  m.  went  to  35  Nassau 
Street  and  called  on  Mr.  Ellis  on  a  pretext  of  having  oil  lands  in 
Texas.  He  became  very  much  interested  and  told  me  he  was  inter- 
ested in  oil  lands  in  Costa  Rica,  but  that  there  were  certain  questions 
about  them.  He  told  me  he  had  no  time  to  discuss  with  me  then, 
but  invited  me  to  luncheon  at  noon  the  next  day.  I  left  but  remained 
watching.  Mr.  Ellis  came  out  at  12.30,  went  to  32  Nassau  Street, 
Room  447,  the  office  of  an  attorney,  W.  R.  Deuel,  lawyer  for  Manuel 
Lardizabal  and  Gonzalez.  He  remained  until  2  p.  m.  and  returned 
to  his  own  office. 

"  April  10,  1918.  *  *  *  Mr.  Ellis  explained  that  he  had  a 
big  proposition  for  oil  in  Costa  Rica,  but  that  the  concession  was 
held  at  present  by  other  interests,  but  that  it  was  not  legal  and  that 
he  was  connected  with  Gonzalez,  Montero  and  Deuel,  who  repre- 
sented them  in  Washington ;  that  they  were  arranging  a  revolution  to 


74 

overthrow  Tinoco,  and  had  the  partial  consent  of  Washington.  He 
further  told  me  that  two  generals  in  the  employ  of  Tinoco  were  ready- 
to  betray  him  as  soon  as  they  got  their  arms  and  ammunition  into 
Costa  Rica ;  that  they  had  these  arms  and  ammunition  at  Turks  Island 
and  Mr.  Ellis  was  to  contract  for  a  schooner  in 'Mexico  to  go  there 
and  carry  same  to  the  coast  of  Costa  Rica. 

"  Further,  that  they  had  two  towns,  one  of  800  men  and  the 
other  of  1,000  men,  ready  and  at  the  call  of  those  generals. 

"  Castro  Quesada  had  gone  to  Washington  with  Deuel  and  made 
arrangements,  and  Washington  had  said  that  it  would  never  recog- 
nize Tinoco,  nor  would  it  favor  Gonzalez,  but  that  if  Gonzalez,  Vice 
President  (not  his  father),  was  put  in  he  would  be  recognized. 

"  That  Castro  Quesada  had  left  for  Panama  to  make  all  arrange- 
ments and  was  waiting  only  for  advices  that  the  second  schooner 
had  been  secured  to  bring  the  arms  and  ammunition  from  Turks 
Island. 

"  Mr.  Ellis  asked  my  co-operation  and  offered  me  a  good  par- 
ticipation in  the  concession  for  oil  lands. 

"  Went  to  17  Battery  Place  to  see  Mr.  Manser;  I  asked  whether 
he  was  there,  and  a  young  man  called  him.  I  asked  him  whether  he 
was  still  interested  in  the  purchase  of  a  boat,  but  he  replied  that  they 
had  practically  closed  a  contract  for  a  50-foot  launch,  but  suggested 
that  he  would  be  pleased  if  I  called  again  in  about  a  week  in  case 
they  may  want  another  one. 

"April  11,  1918.  *  *  *  At  11  a.  m.  went  to  35  Nassau 
Street,  where  a  young  lady  gave  me  a  message  that  Mr.  Ellis  would 
not  be  there  until  two  o'clock.  I  'phoned  at  that  hour  and  he  told 
me  that  he  had  a  message  from  Montero  saying  that  things  were 
going  satisfactorily  and  would  see  him  later  in  the  afternoon. 

"  I  called  on  Mr.  Ellis  at  3.30  p.  m.,  and  he  said  that  after  his 
interview  with  Montero  he  would  introduce  me.  As  Montero  knows 
me  I  had  to  avoid  the  introduction  by  telling  him  I  had  to  leave  town 
and  would  return  to-morrow. 

"  I  watched  the  office,  and  at  5  p.  m.  Montero,  Gonzalez  and 
two  others  entered  and  remained  until  6.30  p.  m.,  when  they  came 
out  and  boarded  a  subway  train  to  42d  Street,  where  they  entered 
Hotel  Astor  and  met  the  lawyer,  Deuel,  and  another  man.  All  went 
to  a  restaurant  on  45th  Street,  where  they  remained  until  8  p.  m. 
During  dinner,  Deuel  went  to  the  telephone  several  times.  He  called 
up  Columbus  4218,  which  I  found  was  the  residence  of  a  lawyer 
named  Jackson,  who  also  has  connections  in  Washington.  When 
they  left  the  restaurant  I  followed  Deuel  to  53  West  72d 
Street.      *     *     * 


75 

"  April  14,  1918.  Went  to  Mt.  Vernon  on  the  morning  train, 
covered  540  Third  Street.  At  9  a.  m.  Mr.  EUis  came  out  alone, 
boarded  a  train  for  New  York.  Arriving  in  New  York,  went  to 
telephone  booth  and  called  up  Bloomfield,  New  Jersey,  telephone 
number  1160-M  Bloomfield;  subject  asked  to  speak  to  Mr.  Montero. 
I  overheard  the  following  conversation : 

"'This  is  Mr.  Ellis;  do  you  want  to  see  me  to-day?     All 
right,  then,  I  will  see  you  to-morrow.     I  did  not  understand  you. 
" '  Did  you  say  Mr.  Gonzalez  is  going  to  your  house  to-day  ? 
With  whom? 

"  '  With  two  other  gentlemen  ?  Oh,  I  see.  Well,  then  you 
will  be  able  to  work  out  the  whole  plan  and  have  it  ready  for  me 
to-morrow." 

"  '  I  must  have  all  the  details  so  we  can  arrange  everything. 
"  '  Will  you  'phone  me  to  the  office  in  the  morning  and  we  will 
get  together?    Very  good.    Goodbye.' 

"  Mr.  Ellis  then  'phoned  Madison  Square  6100  and  asked  for 
Mr.  Otto  Kruger.  Held  a  conversation  with  him.  I  could  not 
catch  it.  He  walked  to  Broadway ;  boarded  a  car,  alighted  at  Thirty- 
first  street;  walked  to  Hotel  Imperial,  and  asked  bell-boy  for  Room 
310.  *  *  * 

"  I  boarded  a  train  for  Bloomfield,  New  Jersey,  and  while  cover- 
ing Montero's  house,  Gonzalez  with  two  other  men  entered.  One 
was  a  man  about  five  feet  six  inches,  short  gray  mustache,  well 
dressed,  about  48  or  50  years  of  age.  The  other  about  five  feet-eight, 
smooth  face,  dark  complected,  between  35  and  40  years  of  age.  I 
covered  the  house  until  4  p.  m.,  when  they  came  out  and  walked 
down  to  the  depot.  There  the  four  stood  conversing  for  some  length 
of  time,  when  Gonzalez  pulled  some  papers  out  of  his  pocket,  holding 
the  one  against  the  side  of  the  building;  at  the  same  time  he  pointed 
to  dififerent  places  on  the  paper.  I  got  in  a  closed  machine  and 
drove  up  until  I  was  within  20  feet  of  them.  The  paper  looked  to 
me  to  be  a  map.  Montero  pulled  a  book  out  of  his  pocket  and 
started   writing   as   Gonzalez   dictated." 

This  brings  the  following  new  names  into  the  conspiracy : 

Mr.  W.  H.  Ellis,  Mexican  banker  and  broker,  35  Nassau  street, 
New  York; 

Walter  Rogers  Deuel,  an  American  attorney,  formerly  connected 
with  the  District  Attorney's  ofiice  in  New  York ; 

Manuel  Lardizabal,  a  Honduran,  residing  at  758  West  End  ave- 
nue, New  York,  whose  connection  with  a  plan  to  overthrow 
the  present  Honduran  government  is  known  to  the  Depart- 
ment of  Justice;  and 

An  American  lawyer  by  the  name  of  Jackson. 


W.  H.  Field  appears  to  have  acted  in  the  matter  for  the  Department 
of  Justice,  a  sort  of  guiding  spirit  traveling  frequently  to  Washington 
and  calling  there  upon  various  Government  departments  and  Senators  in 
an  active  pro-Gonzalez  campaign,  in  opposition  to  Tinoco  and  the  large 
American  interests  established  in  Costa  Rica. 

However,  the  conspirators  were  losing  headway,  as  our  Government 
seemed  to  be  getting  to  a  point  where  the  recognition  of  the  Tinoco  Govern- 
ment was  under  consideration.  The  Gonzalez  group  knew  this  and  a  strong 
card  had  to  be  played.  The  United  States  Government  and  the  American, 
as  well  as  the  Latin  American  public,  had  to  be  shown  that  the  recognition 
of  Tinoco  would  be  highly  detrimental  from  various  viewpoints. 

Here  is  where  the  amazing  part  of  the  story  comes  in.  It  may  be  com- 
prehensible that  a  foreigner  should  intrigue  against  Americans,  even  in  war 
time,  for  the  sake  of  principle  or  other  aims,  but  it  is  certainly  remarkable 
that  an  American  apparently  closely  connected  with  the  Department  of 
Justice  should  associate  himself  with  a  pro-German  alien  fighting  American 
interests. 

The  main  purpose  of  the  intrigue  was  to  deliberately  discredit  the  writer 
with  his  own  Government.  This  fact  is  proven  by  a  report  filed  in  May,  1918, 
by  W.  Wright,  connected  with  the  New  York  Division  of  the  Department  of 
Justice,  under  Superintendent  Offley.  The  amazing  allegations  made  were 
the  following,  taken  by  the  writer  from  the  report  itself : 

W.  S.  and  L.  G.  Valentine  are  pro-German ; 

W.  S.  Valentine  is  allied  with  President  Carranza  of  Mexico  in  a 
scheme  to  overthrow  Latin  American  governments  by  placing  pro- 
German  governments  in  their  place,  with  the  aid  of  German  money ; 

W.  S.  and  L.  G.  Valentine  are  creating  sentiment  throughout 
Latin  America  against  the  United  States,  with  German  money ; 

L.  G.  Valentine  was  in  close  touch  with  German  Ambassador 
Bernstorff ; 

The  overthrow  of  the  Gonzalez  Government  was  for  the  purpose 
of  furthering  German  aims ; 

The  Gonzalez  overthrow  was  planned  and  financed  by  W.  S.  and 
L.  G.  Valentine  in  New  York,  and  as  a  result  thereof  they  secured 
from  the  Tinoco  Government  an  oil  concession  for  German  interests, 
etc. 

The  treachery  of  this  report  is  demonstrated  by  the  nature  of  the  in- 
formants. Indeed,  under  the  heading  "  Sources  of  Information,"  the  follow- 
ing names  are  given : 

W.  H.  Field,  whose  identity  seemed  to  be  thoroughly  known,  as 
he  was  not  otherwise  described  in  the  strange  report ; 

Alfredo  Gonzalez,  the  deposed  President  of  Costa  Rica ; 


n 

Manuel  Lardizabal,  a  Honduran  implicated  in  Honduras  revolu- 
tionary schemes ; 

Humberto  Ferrari,  another  Honduran,  close  friend  and  associate 
of  Lardizabal's;  he  is  mentioned  as  having  given  previous  valuable 
information  to  the  Department  of  Justice. 

The  evident  parti-pris  of  the  informants  brands  the  report  as  nothing 
but  a  crude  but  nevertheless  fruitful  attempt  to  deceive  our  Government,  a 
step  of  the  actors  in  this  melodrama  to  down  the  Americans  whose  interests 
were  to  be  adversely  affected  by  the  return  of  the  Gonzalez  faction  to  power. 
No  one  connected  with  the  United  States  Government  ever  called  on  the 
writer  for  information  in  the  matter.  He  never  knew,  until  recently,  that 
such  charges  existed.  He  was  never  given  an  opportunity  to  defend  himself. 
Still  this  report,  false  on  its  face  by  virtue  of  its  origin  alone,  has  remained 
on  file  in  various  departments  of  our  Government,  and,  the  author  is  credibly 
informed,  was  sent  to  our  authorities  in  Panama,  thereby  undermining  his 
standing. 

It  was  a  mystery  to  the  writer,  until  informed  of  the  report  mentioned, 
why  his  cables  and  letters  were  unnecessarily  delayed  and  tampered  with, 
and  his  actions  regarded  with  peculiar  scrutiny  by  United  States  Govern- 
ment officials. 

Without  suspecting  any  such  intrigue,  the  author  had  aided  to  the  best 
of  his  ability  in  revealing  German  doings  in  Costa  Rica.  At  the  time  the 
Wright  report  was  filed  with  the  Department  of  Justice  he  had  submitted  to 
the  Naval  Intelligence  in  Panama  a  feasible  plan  for  seizing  large  files  of 
German  documents  which  had,  since  the  outbreak  of  the  war,  been  closely 
concealed  and  guarded.  The  Intelligence  Officer  in  Panama  was  acting  upon 
the  writer's  request  for  assistants  to  carry  out  the  plan  when,  it  is  clear 
from  the  dates,  the  Wright  report  reached  Panama.  Naturally,  with  such 
charges  pending,  the  writer's  plan  was  discounted,  no  assistants  were  fur- 
nished, and  the  important  Hun  documents  are  doubtless  still  resting  in  their 
place  of  concealment. 

That  the  above  mentioned  charges  of  the  Gonzalez  group  and  W.  H. 
Field  were  taken  seriously  by  our  Government,  regardless  of  their  unreliable 
origin,  is  further  shown  by  the  following  circumstance : 

In  September,  1918,  the  author's  wife  left  Costa  Rica  for  New  York. 
Upon  her  arrival  she  was  surrounded  by  five  or  six  agents,  evidently  repre- 
senting the  Customs  Plouse,  Department  of  Justice  and  Naval  Intelligence, 
and  subjected  to  an  excruciating  cross-examination.  During  the  course 
of  the  ordeal  she  was  given  to  understand  that  her  husband  was  representing 
Hun  interests.  After  it  was  over,  she,  her  little  two-year  old  baby  and  her 
nurse  were  submitted  to  a  most  complete  and  humiliating  physical  examina- 
tion, only  befitting  the  unchivalrous  practices  of  Prussianism.     Of  course 


78 

such  things  must  be  expected  in  war-times,  but  it  does  not  speak  well  of 
our  Secret  Service  efficiency  that  our  Government  departments  were  unable 
to  see  through  the  crude  methods  of  the  Gonzalez  group,  placing  more  faith 
in  the  words  of  intriguing  aliens  than  in  those  of  an  American  whose  record 
is  on  file  at  the  State  Department;  for  the  writer  had  to  furnish  it  when 
applying  for  an  appointment  in  the  Diplomatic  Service. 

When  the  author  arrived  in  New  York,  in  December,  1918,  with  a 
trunkful  of  important  documents,  neither  his  baggage,  nor  his  papers,  nor 
he  himself  were  examined.  This  blunder  had  evidently  been  discovered.  If 
that  was  so — how  is  it  that  our  Government  has  taken  no  slips  to  curb  the 
activities  of  those  aliens  zuho  have  been  maliciously  and  wilfully  misinform- 
ing our  authorities,  and  to  stop  the  Americans  aiding  them  from  continuing 
in  their  nefarious  warfare  against  legitimate  United  States  interests?  Hozv 
is  it  that  those  same  aliens  are  still  receiving  the  moral  and  physical  support 
of  our  Administration? 


79 


.GONZALEZ'     ATTEMPTS     TO     INFLUENCE    THE    AMERICAN 
SENATE   AND   PUBLIC. 

His  Publicity  Campaign  Against  United  States  Interests.      Their 
Safes  Rifled  "  With  the  Aid  of  United  States 
Government  Officials?" 

Gonzalez'  schemes  for  unseating  Tinoco  were  not  making  much  prog- 
ress, but  his  group,  apparently  well  supplied  with  money,  was  not  dis- 
couraged. The  next  plan  was  to  work  up  popular  feeling  against  Tinoco 
and  the  American  interests  whom  he  desired  to  deprive  of  their  rights. 
This  was  carried  out  with  remarkable  statesmanship  and  psycho-analysis. 

Nothing  predominates  in  the  mind  of  the  average  Latin  so  much  as  his 
sense  of  nationality  and  sovereignty.  This  was  the  nerve  center  upon  which 
Hun  intriguers  had  exerted  methodical  pressure.  The  "  rapacious  American 
eagle  "  had  for  years  been  cleverly  pictured  by  them  as  hovering  above  the 
defenseless,  small  Latin-American  nations,  only  to  precipitate  himself  upon 
and  devour  them  at  the  first  opportune  moment.  Our  actions  in  Panama, 
Nicaragua  and  Santa  Domingo  had  been  pointed  out  as  striking  examples 
thereof  which  made  the  Latin  blood  boil.  The  "  your  turn  next "  idea  had 
been  the  venomous  dagger  thrust  into  their  minds  and  resulted  in  a  deep 
distrust  of  American  motives,  gradually  developing  into  silent,  if  not  out- 
spoken, anti-Americanism. 

This  deep-rooted  sentiment  seemed  to  strike  the  Gonzalez  group  as  a 
propitious  field  for  propaganda.  If  it  could  be  shown  that  through  Don 
Alfredo's  downfall  American  interests  had  secured  the  controlling  lever  of 
Costa  Rica,  Central,  and  probably,  Latin  Americans  would,  on  the  one  hand, 
become  antagonistic  to  Tinoco,  and,  o'n  the  other  hand,  President  Wilson's 
conception  of  international  idealism  could  be  relied  upon  to  be  equally 
afifected  in  Gonzalez'  favor. 

"  Unscrupulous  Americans  took  advantage  of  poor,  little  Costa 

Rica  and,  by  clever  extortion,  secured  for  a  plate  of  lentils  oil  lands 

worth  hundreds  of  millions. 

"  Costa  Rica  fell  victim  to  concession  hunters,  commercial  fili- 

busterers,  and  Tinoco  was  their  blind  and  obedient  tool." 

Music  with  this  "  Leitmotiv,"  it  was  figured,  would  not  fail  to  impress 
the  United  States  Senate  and  the  public  at  large. 

Here  is  how  the  campaign  appears  to  have  been  organized : 
W.  H.  Field,  an  American  familiar  with  the  Latin  character,  and,  every- 
thing indicates,  closely  connected  with  the  Department  of  Justice,  was  acting 
as  Gonzalez'  campaign  manager. 


80 


PJUUA  DB  roM  amo  X4) 


Artloulo  X7II 

Bl  oontratlsta  o  la  ConrpaKla  que  forme  de  aouerdo  eon  la  ol&ustila 
anterior  se  oompromete  a  mantener  en  Costa  Rica, durante  todo  el  tiem* 
po  de  este  contrato  un  representante  oon  Instrucciones  y  poderes  lega- 
les  beistantes  para  resolyer  todos  los  asuntos  relaoionados  con  este 
contrato* 

Artloulo  ZTIII 

Cualquier  dificultad  que  surgiere  entre  las  partes  per  raz6n  de 
este  contrato, Ber4  reeuelta  oonforme  a  las  leyes  del  paisy  en  ningua 
oaso  el  oontratlsta  podrd  reeurrir  a  la  Yia  dlplomatica^- 

En  fe  de  lo  oual  firman  los  otorgantes  en  la  oiudad  de  San  Jos4  a 
los  veintitrSs  dfas  del  mes  de  Setiembre  de  mil  noveoientos  quiaoe* 


/ 


San  JosS,  Telntitr^s  de  Setiembre  de  mil  noveoientos  quince. 

ApruSbase  el  contrji^o  anterior 
r 


SI  Seoretario  de  Estado  en  el  Oespacho  de  Vomento 


The  above  is  the  last  page  of  the  American  oil  contract  bearing  President  Gon- 
zalez' signature  below  the  sentence  "  the  foregoing  contract  is  approved."  After  the 
Legislature  had  acted  upon  his  subsequent  special  message  of  recommendation  and 
ratified  the  grant,  President  Gonzalez  vetoed  it  by  claiming  the  right  to  rescind  his 
own  signature.  The  Legislature  thereupon  nullified  his  veto  and  the  contract  went 
into  effect  on  November  12,  1916,  two  and  one-half  months  before  the  Tinoco  coup 
d'etat.  Gonzalez  now  alleges  that  his  overthrow  was  engineered  by  the  American  oil 
group,  in  order  to  secure  the  oil  concessions  from  the  Tinoco  Government ! 


81 

W.  R.  Deuel,  another  American,  former  Assistant  District  Attorney 
of  New  York,  became  the  legal  adviser. 

Manuel  Lardizabal,  the  Honduran  of  revolutionary  tendencies,  became 
a  valuable  ally. 

Manuel  Castro  Quesada,  Gonzalez'  Washington  Minister,  took  advan- 
tage of  his  connections  at  the  national  capital  in  an  attempt  to  secure  the 
moral  support  of  our  Government  for  an  anti-Tinoco  revolution. 

Rafael  Oreamuno,  former  secretary  of  the  Costa  Rican  Legation  in 
Washington,  a  clever  young  lawyer,  was  a  handy  aid  into  whose  hands 
was  placed  the  anti-Tinoco,  pro-Gonzalez  campaign  in  the  Latin-American 
legations  and  embassies  in  Washington. 

W.  H.  Ellis,  Mexican  banker  and  broker,  was  to  secure  financial  aid 
for  the  revolution,  in  exchange  for  an  oil  concession. 

Edmundo  Montealegre,  brother-in-law  and  intimate  friend  of  the 
German  Consul  in  Costa  Rica,  and  Eduardo  Bonilla,  Costa  Ricans,  were 
evidently  aiding  with  good  advice  and  money  for  the  sole  purpose  of 
quenching  their  vendetta  thirst  upon  President  Tinoco's  brother.  They 
were  the  ones  who  established  the  close  connection  between  Gonzalez  and 
W.  H.  Field. 

There  are  many  other  minor  actors,  but  the  above  were  the  stars  in 
the  "  comic  opera  "  which  has  just  reached  a  dramatic  denouement.  ^ 

Here  we  have  a  group  of  aliens  with  a  pro-German  at  their  head,  openly 
preparing  on  our  hospitable  shores  a  revolution  against  a  pro- Ally  govern- 
ment in  Central  America  and,  actively  aiding  that  clique,  several  Americatts, 
at  least  one  of  zvhom  is  either  officially  connected  or  in  close  touch  with  the 
Department  of  Justice! 

There  are  two  powerful  groups  of  United  States  interests  operating 
in  Costa  Rica,  the  United  Fruit  Company,  and  the  oil  interests.  These,  the 
Gonzalez  group  figured,  must  be  shown  to  be  the  "  claws  of  the  rapacious 
American  eagle."  A  theory  appealing  romantically  to  the  American  and 
Latin  American  public  alike  was  thereupon  worked  out. 

The  first  stage  of  the  campaign  was  the  publication  of  a  series  of  sen- 
sational articles  in  a  paper  called  the  "  New  York  Curb,"  the  following 
extracts  rendering  an  idea  of  the  Gonzalez  publicity  trend : 

"  Oil  and  Fruit  Interests  here  charged  with  creating  Costa  Rican 
Revolution  for  profit." 

"  Oil  concessions   from   de   facto  government  of  problematical 
value." 

"  Valentine  is  accused  of  bribing  Costa  Rican  Legislature." 
"  Gonzalez,  warned  of  impending  coup,  ignored  same." 
"  Germany  and  Austria  only  nations  to  recognize  de  facto  gov- 
:nt." 
People  rising  to  throw  off  Tinoco  Government." 


82 

"  Valentines  got  concession  from  Tinoco  and  sold  it  to  Sinclair 
interests." 

In  other  words,  it  was  claimed  that  the  United  Fruit  Company  and  the 
oil  interests  had  formed  a  combination  and  jointly  overthrown  the  Gon- 
zalez Government,  placing  Tinoco  in  the  presidency  as  their  handy  tool. 
In  order  to  contradict  once  and  forever  this  ridiculous  allegation,  the 
United  Fruit  Company  caused  a  hearing  to  be  held  before  Counsellor  Polk 
of  the  State  Department,  at  which  it  was  shown  conclusively  that  no 
connection  existed  between  the  United  Fruit  Company  and  the  oil  venture, 
and  that  the  former  had  nothing  whatever  to  do  with  the  change  of  gov- 
ernment. 

Upon  hearing  of  the  absurd  allegations  the  author,  then  in  Panama, 
sent  an  affidavit  to  the  Department  of  State,  giving  a  summary  of  the  oil 
negotiations;  showing  that  the  concession  had  been  a  Gonzalez  initiative; 
that  it  had  been  approved,  vetoed,  reapproved  and  capitalized  during  Don 
Alfredo's  regime ;  and  that  neither  the  writer  nor  anyone  connected  with  him 
had  the  least  thing  to  do  with  the  Tinoco  coup  d'etat. 

Their  first  plan  having  failed,  the  Gonzalez-Field  combination  had  to 
think  out  something  better.  Field's  ingenuity  and  his  closeness  to  the 
Department  of  Justice  proved  valuable.  We  were  at  war  and  our  Govern- 
ment had  built  up  a  wonderful  machinery  for  prying  into  the  affairs  of 
Americans  and  aliens  alike,  in  search  for  pro-German  connections.  The 
evidence  indicates  that  this  machinery  was  taken  advantage  of  by  the 
Consalez  group;  that  '' zmth  the  aid  of  United  States  Government  officials" 
the  private  correspondence  in  the  oil  venture  was  seized  and — this  is  the 
most  amazing  feature — delivered  to  the  deposed  pro-German  President,  Gon- 
zalez. Of  course  nothing  was  encountered  therein  which  could  even  remotely 
reflect  upon  the  genuine  Americanism  of  those  connected  with  the  petroleum 
deal.  As  was  natural,  however,  the  private  letters  contained  such  intimate 
and  frank  expressions  as  are  customary  between  associates,  between 
nephew  and  uncle,  characterizing  certain  individuals  in  a  somewhat  un- 
complimentary manner.  The  correspondence  abounded  with  data  showing 
Gonzalez'  treachery,  but  the  paragraphs  bearing  thereon  were  wisely  sup- 
pressed and  use  made  only  of  passages  favorable  to  the  former  president. 
These  latter  passages  were  contained  in  reports  rendered  prior  to  the  dis- 
covery of  Gonzalez'  bad  faith.  Had  the  later  reports  been  published  as 
well,  the  President  would  have  been  shown  up  in  his  true  light.  By  the 
clever  manipulation  and  fitting  comments  of  an  experienced  newspaper  man, 
a  sensational  story  was  pieced  together  to  which  the  "  New  York  Herald  " 
and  the  "  New  Orleans  Picayune  "  gave  prominent  space  for  six  consecutive 
days.  The  following  extracts  thereof  show  the  nature  of  the  alleged  expose : 
"  Revolution  in  Costa  Rica  revealed  as  outgrowth  of  bribery 
for  oil  fields." 


83 

"  Deposed  President  tells  why  Mr.  Wilson  refused  recognition. 
Names  New  York  men." 

"  General  Gonzalez  says  the  Tinoco  uprising  was  financed  from 
this  city." 

"  This  is  a  story  of  how  a  group  of  Americans  seekmg  an  oil 
concession  bought  a  government  in  Central  America,  and,  failing 
finally  to  win  over  the  President  of  the  Republic,  instigated  a  revolu- 
tion. It  gives  for  the  first  time  the  reasons  why  President  Wilson 
so  steadfastly  has  refused  to  recognize  the  revolutionary  government" 

"  The  President  was  busy  with  his  fiscal  reforms ;  a  great  ad- 
mirer of  President  Wilson,  he  was  seeking  to  apply  to  Costa  Rica, 
then  in  financial  difficulties,  some  of  the  measures  being  applied  in 
the  United  States." 

An  important  Spanish  publication  called  "  La  Reforma  Social,"  pub- 
lished, in  its  number  of  January,  1919,  a  20-page  article  over  the  signature 
of  a  noted  anti-American  Venezuelan,  the  following  extracts  of  which  show 
that  Latin  Americans  had  been  greatly  impressed  by  Gonzalez'  publicity 
campaign : 

"  The  act  of  treason  and  force  by  which  the  constitutional  Presi- 
dent of  Costa  Rica  was  overthrown  and  substituted  by  his  Minister 
of  War  on  January  27,  1917,  had  its  origin  in  the  intrigues,  machina- 
tions and  conspiracy  of  an  American  company." 

*'  Ex- President  Gonzalez,  object  and  victim  of  the  crime  per- 
petrated by  his  Minister  of  War  and  conceived  and  prepared  under 
the  inspiration  and  with  the  co-operation  of  that  Company." 

"  But  never  in  America  has  there  been  a  case  of  a  government 
overthrown  by  the  opposition  and  the  corrupting  and  dissolving 
power  of  a  foreign  concessionary  company.  What  aggravates  the 
case  is  the  fact  that  the  government  destroyed  by  that  company  was 
a  constitutional  government  presided  over  by  a  man  whose  only 
crime  was  precisely  his  unshakable  integrity.  The  company  could 
not  corrupt  him,  and  to  defeat  the  will  of  the  President  and  acquire 
at  any  cost  the  monopoly  to  which  it  aspired,  influenced  and  allied 
against  him,  through  intrigue,  imposition  and  corruption,  all  parties 
and  Congress,  after  repeated  and  vain  efforts  to  secure  the  help  of 
Washington  in  the  shape  of  diplomatic  aid  or  frank  intervention. 
This  explains  why  everybody  was'  with  the  usurper  when  he  assumed 
in  the  garrison  the  dictatorship  on  January  27th.  They  were  all  sold 
to  the  company  in  one  shape  or  another  and  interested  in  the  ap- 
proval of  the  contract." 


Tfe- 
>ar 
Itr- 
to, 
ide 
lue 

)0S 

;>or 
po- 
tie- 
ita- 

i6n 
me 
en- 
ec- 
es- 


84 


Decreta 

Articulo  linico. — Impruebase  el  proyecto 
de  contrato  «Pinto-Greulich»  de  23  de  setiem- 
bre  de  191 5. 

Dado,  etc 

Si  contra  \o  que  espero,  ^1  Congreso  de- 


termina  rechazar  esta  iniciativa  v  ratificar  consr 
titucionalmente  el  decreto  numero   t;  1 .  yo  en 


respetuoso  acatamiento  de  sus  resoluciones,  lo 
mandare  ejecutar,  pero  de  sus  consecuencias, 
no  sera  mi  nombre  responsable,  ni  ante  el  pais 
ni  ante  la  histona. 

Soy  de  U    U    senores  Secretarios.  muy 
atto.  s.  s., 

Alfredo  Gonzalez 

San  Jose,  2 1  de  agosto  de  1 9 1 6 


ALFREDO  GONZALEZ 

Presidente  Constitucional  de  la  Republica 
de  Costa  Rica, 

Decreta. 

Articulo  unico.  —  Convocase  al  Congreso 
Constitucional-  a  sesiones  extraordinanas  que 
se  inauguraran  a  las  dos  de  la  tarde  del  lunes 
seis  de  noviembre  proximo,  con  el  objeto  de 
que  conozca  de  los  siguientes  asuntos  pen- 
dien^es. 

1  ° — Ley  sobre  formacion  del  Catastro, 

2  ° — Ley  General  de  Impuestos  Directos; 
3.° — Ley  sobre  la  Contribucion  Territorial; 
4.° — Ley  del  Impuesto  sobre  la  Renta; 
5.° — Ley  sobre   la  Contribucion  para  las 

Obras  Publicas  de  mteres  especial  o  local:  v_ 

•"^""'^  6  ° — Del  veto  del   Poder  Eie^utivo  a  la 

f   Ley  que  aprueba  el  Contrato  Pinto-Grenlirjj^J 

Dado  en  la  ciudad  de  San  Jose,  a  los 
vemtiocho  dias  del  mes  de  octubre  de  mil  no- 
vecientos  diez  y  seis. 

ALFREDO  GONZALEZ 

El  Secretario  de  Estado 
en  el  Despacbo  de  Gobernaci<5n, 

Juan  Rafael  Arl\s 


Ale 

en 

tiei 


Orr 
ten 
de 
ten 
Es 
ha 
Pri 
zu( 


FICIAL 


m 


)lsos 
^arte 

can. 
s  de 

itral, 
den- 
Con- 
n   el 


lenta 
abli. 
Al 
itre- 
d  de 
y  en 
:plo- 
uevo 
\cio- 
»ro- 


N°    1 

El  Congreso  Constitucional  de  la 

REPtJBLiCA  de  Costa  Rica 

En  sesion  celebrada  el'dia  diez  de  noviem- 
bre de  mil  novecientos  dieciseis.  acordo  por 
mas  de  la  mayoria  de  dos  tercios  requerida  por 
la  Constituci6n^olitica,  xiiandar  promulgar  en 
La  Gaceta,  Diario  Oficial,  el  decreto  que  an- 
tecede,  para  sus  efectos  de  Ley  de  la  Republica. 

Maximo  FernAndiez 

Presidente 

Ad.  Acosta  Alberto  Calvo  F. 

Secretario  SecreUrio 


Seeretarfas  de  Bstado 


85 


From  Official  Gazette  No.  44,  Year  38,  Tuesday,  August  22,  1916. 

*  *  *  //  contrary  to  my  hope  Congress  determines  to  reject  this  initiative  and 
constitutionally  ratifies  decree  No.  51,  /  shall  have  it  executed  in  respectful  obedience 
to  its  resolutions    *    *    *_ 

(Signed)     Alfredo  Gonzalez. 
San  Jose,  August  21st,  1916. 


From  Official  Gazette  No.  101,  Year  38,  Sunday,  October  29th,  1916. 

Alfredo  Gonzalez, 

Constitutional  President  of  the  Republic  of  Costa  Rica, 

Decrees  : 

Sole  article.  The  Constitutional  Congress  be  convened  in  special  sessions  to  be 
inaugurated  at  2  P.  M.,  Monday,  November  6th  next,  for  the  purpose  of  taking  up  the 
following  pending  matters : 

6.  The  veto  of  the  Executive  Power  to  the  Law  approving  the  Pinto-Greulich 
contract    *    *    *, 


From  Official  Gazette  No.  113,  Year  2)d>,  Sunday,  November  12th,  1916. 

No.  1. 

The  Constitutional  Congress  of  the  Republic  of  Costa  Rica  in  its  session  of 
November  10th,  1916,  decreed  by  more  than  the  majority  of  two-thirds  required  by  the 
Political  Constitution  to  cause  to  be  promulgated  in  the  Gazette,  Official  Daily,  the 
foregoing  decree  for  its  effects  as  Law  of  the  Republic. 

(Signed)     Maximo  Fernandez, 

President. 
(Signed)     Adan  Acosta,  (Signed)     Alberto  Calvo  F., 

Secretary.  Secretary. 


From  that  day  until  January  27,  1917,  when  Gonzalez  was  overthrown,  the  Ameri- 
can oil  grant  known  as  the  Pinto-Greulich  contract  and  referred  to  in  the  above  final 
decree  as  ratified  over  the  President's  so-called  veto,  Gonzalez,  faithful  to  his  above 
printed  promise  of  August  21,  1916,  and  in  accordance  with  the  Costa  Rican  constitu- 
tion, allowed  the  peaceful  exploitation  of  the  oil  lands  covered.  The  President' accepted 
the  respective  guarantee  deposit  and  certified  in  writing  to  the  contractor's  compliance 
with  various  clauses.  The  validity  of  the  grant  was  never  questioned ;  Gonzalez  did 
not  appeal  to  his  Courts  and  placed  no  obstacle  in  the  capitalization  of  the  concession 
which  was  effected  on  December  23,  1916,  over  a  month  before  his  downfall.  Never- 
theless, it  is  now  claimed,  in  the  deposed  'ruler's  pubHcity  campaign,  after  two  years 
and  a  half  have  elapsed,  that  the  American  oil  grant  grew  out  of  the  Tinoco  Govern- 
ment following  that  of  Gonzalez,  and  that  the  latter's  regime  was^  overthrown  with  the 
financial  aid  of  the  American  petroleum  group  intent  upon  ousting  Gonzalez  because 
he  had  refused  to  honor  the  grant! 


86 

What  is  shown  in  the  documents  is  summarized  by  Mr.  Gonzalez  him- 
self in  a  letter  he  wrote  under  date  of  September  21,  1918,  to  Senator  Hitch- 
cock, Chairman  of  the  Senate  Committee  on  Foreign  Affairs.  The  latter, 
featured  by  the  newspapers  named,  said  in  part : 

"  Should  the  sub-committee  resolve  to  conduct  that  investigation, 
I  would  like  very  much  to  be  privileged  with  an  opportunity  to  bring 
to  its  knowledge  documentary  evidence  of  particular  importance  in 
connection  with  the  matters  to  be  investigated. 

"  I  wish  to  submit  to  the  sub-committee  private  correspondence 
of  the  American  citizens  Messrs.  Lincoln  G.  and  Washington  S.  Val- 
entine, and  others,  for  the  purpose  of  proving  the  following: 

"  '  that  the  conflict  between  a  group  of  American  citizens  and 
the  Executive  of  Costa  Rica  over  the  granting  of  an  oil  concession, 
coveted  by  private  American  interests  and  opposed  by  the  President 
of  Costa  Rica,  was  the  chief  cause  of  the  coup  d'etat  of  January  27, 
1917,  which  overthrew  the  constitutional  government  of  that  country; 

" '  that  Federico  Tinoco,  as  Minister  of  War,  raised  in  arms  and 
overthrew  the  legal  government  in  furtherance  of  his  bribery  agree- 
ment with  Valentine. 

" '  In  the  coup  d'etat  of  January  27,  1917,  Federico  Tinoco  was 
only  the  tool  of  American  capitalists.'  " 

The  pending  publication  of  these  articles  was  known  to  the  writer's 
uncle,  Washington  S.  Valentine  of  New  York,  a  week  or  so  before.  He 
communicated  with  Mr.  William  A.  Willis,  Acting  Managing  Editor  of 
the  New  York  Herald,  asking  him  to  hear  the  other  side  before  publishing 
anything,  because  the  charges  were  malicious  and  false.  Mr.  Willis  there- 
upon made  a  most  surprising  reply,  throwing  the  whole  responsibility  upon 
our  own  Government.    His  statement  may  be  summarized  as  follows : 

''  I  am  sorry,  Mr.  Valentine,  the  material  upon  which  the  articles 
are  based  comes  from  the  Naval  Intelligence  and  the  Department  of 
Justice.    Nothing  will  deter  us  from  publishing  the  articles." 

That  the  Herald  and  the  Picayune  were  firm  in  this  belief  goes  forth  from 
the  following  introductory  paragraphs : 

"  The  revelations  are  based  on  documentary  evidence  accumu- 
lated by  the  deposed  president,  in  some  cases  with  the  aid  of  United 
States  government  officials. 

"  Until  now  the  truth  of  the  Costa  Rican  case  has  not  been  made 
public  and  was  knotun  only  to  a  fezv  officials  of  the  American  Gov- 
ernment. 

"  The  originals  were  concealed  in  safes  in  a  dozen  places.^' 


Z7 

In  other  words,  it  is  alleged  that  the  United  States  Government  took 
advantage  of  its  wartime  secret  machinery  to  rifle  the  safes  of  large  Amer- 
ican interests,  seise  their  private  correspondence  and  deliver  it  to  Alfredo 
Gonzalez,  a  deposed  pro-German  president,  so  that  he  might  make  us^ 
thereof  by  conspiring  and  intriguing  ad  libitum  against  American  interests! 
The  author  was  loath  to  believe  this  and  rather  of  the  opinion  that 
the  "  United  States  Government  officials  "  referred  to  were  mere  under- 
lings working  without  the  authority  of  department  heads  ;  that  the  New  York 
Herald  and  the  New  Orleans  Picayune  were  mistaken  in  assuming  that  the 
story  they  published  was  given  out  by  our  Government  as  the  first  explana- 
tion of  President  Wilson's  motive  in  refusing  to  recognize  the  Tinoco 
Government.  It  must  be  remembered  that  Mr.  Wilson  took  this  decision 
in  February,  1917.  The  "  rifling  of  the  safes  "  referred  to  occurred  as  late 
as  the  summer  of  1918. 

It  now  appears  that  the  State  Department  was  behind  the  published 
story,  unless,  indeed,  the  Associated  Press  was  mistaken  in  releasing  on 
August  22d,  1919,  the  following: 

"  It  was  stated  here  today  officially  that  American  citizens  had 
been  implicated  in  the  Tinoco  revolution.  The  State  Department  was 
said  to  have  letters  written  by  American  conspirators  telling  of  their 
investments  with  the  Tinoco  faction,  but  the  Department  refused 
to  make  public  either  the  letters  or  the  names  of  the  Americans  in- 
volved." 

If  this  version  and  that  of  the  Herald  and  Picayune  are  correct  it  reveals 
a  stupendous  condition  of  affairs,  and  the  question  might  be  asked : 

"  Was  our  Government  so  hard  pressed  for  finding  grounds 
to  justify  before  the  pubHc  its  persistent  enmity  towards  the  Tinoco 
Government  and  its  inexplicable  friendship  for  the  Gonzalez  faction 
and  were  Americans  whose  views  on  the  subject  differed  from  those 
of  the  Administration  to  be  made  the  '  goats  '  ?  " 

The  failure  of  our  Government  to  deny  the  amazing  allegation  con- 
tained in  the  publications  mentioned  lends  much  color  to  this  question. 
The  writer  called  on  the  State  Department  official  in  charge  of  Central 
American  affairs  and  asked  to  be  officially  informed  whether  such  charges 
as  had  been  published  were  entertained  by  the  State  Department.  The  reply 
was  that  the  Department  had  taken  no  cognizance  of  the  publications  and 
that  no  charges  existed. 

Either  the  allegations  referred  to  are  before  our  Government  and 
given  credence,  in  which  case  the  accused  Americans  should  be  called  upon 
for  an  explanation  and  defence ;  or  the  Government  knows  the  charges  to  be 
untrue,  in  which  case  a  clear  denial  should  be  made.  It  is  remarkable,  how- 
ever, that  President  Wilson  should  apparently  base  his  present  Costa  Rican 


policy  upon  such  charges,  which  even  a  superficial  investigation  would  prove 
baseless. 

However  absurd  and  false  on  their  face  the  charges  which  the  deposed 
executive  caused  to  be  published  and  placed  before  the  United  States  Senate, 
are,  it  is  necessary  to  occupy  a  little  space  in  contradicting  them. 

That  the  author  Jmd  no  interest  in  overthrozving  the  Gonzales  Govern- 
ment and  placing  the  Tinoco  regime  in  its  stead  is  clearly  shozvn  by  the 
fact  that  the  oil  concession  at  the  bottom  of  the  story  was  properly  granted 
and  capitalised  during  Don  Alfredo's  tenure  of  office,  as  has  been  demon- 
strated in  this  account.  Moreover,  the  differences  between  the  deposed 
president  and  the  writer  in  the  matter  had  been  patched  up  two  and  a  half 
months  before  he  ceased  to  hold  his  high  office.  No  legal  formalities  were 
lacking.  No  additional  facilities  were  needed  or  sought.  Gonzalez"  opposi- 
tion had  ceased,  friendly  messages  having  been  exchanged  with  him..  IVJta^f 
advantage  zvas  there  in  ousting  him? 

As  to  the  charges  of  bribery,  Don  Alfredo  himself  has  specified  them 
in  his  letter  already  cited  to  Senator  Hitchcock,  Chairman  of  the  Foreign 
Relations  Committee,  on  September  21,  1918: 

"That  through  the  expenditure  of  several  hundred  thousands 
of   dollars  the  said  American  interests   represented   in   Costa   Rica 
by  Lincoln  G.  Valentine,  in  order  to  have  coveted  concessions  passed 
by  Congress  and  to  avoid  certain  legal  obstacles,  bribed  and  cor- 
rupted the  following  public  officials  of  Costa  Rica : 
"Two  successive  Presidents  of  Congress; 
"Several  Congressmen; 
"  The  Attorney   General ; 
"  A  Judge  of  the  Civil  Court ; 
"  A  Clerk  of  the  Court  of  Appeals ; 
"  Employees  of  the  Court  of  Law  for  Fiscal  Matters ; 
"  Employees  of  the  Presidential  Mansion  and  of  the  offices  of 

the  Ministries,  and  other  employees  of  the  Government. 
"  That  the  same  American  interests  bribed  the  then  Minister  of 
War,  Federico  Tinoco,  with  whom  they  conspired  and  planned  the 
overthrow  of  the  constitutional  government  of  Costa  Rica.  " 

In  other  words,  Gonzalez  claims  that  his  own  Administration  was  cor- 
rupt with  the  exception  of  himself  and  his  immediate  friends.  It  is  prob- 
ably the  only  case  on  record  of  a  former  president  defaming  his  own 
Administration,  country,  political  appointees  and  friends,  by  branding  them 
as  "  purchasable  articles  ",  and  coming  before  the  public  of  the  United 
States,  crying: 

"  My  compatriots  are  all  crooked.     You  can  buy  them   for  a 
song.     I  alone  was  honest  and  for  that  reason  ousted!" 


As  a  selfish  come-back  to  smooth  over  his  wrinkled  pride,  Gonzalez  was 
striving  to  wipe  out  with  one  stroke  of  the  pen  the  enviable  record  of 
the  country  over  which  he  had  presided.  Costa  Rica  had  for  many  decades 
enjoyed  the  reputation  of  the  "  Switzerland  of  America  " ;  of  orderly  and 
honest  institution;  well  regulated  and  fair  justice;  ambitious  progressive- 
ness  through  modern  education  and  hard  working  citizens.  However,  the 
deposed  ruler  cannot  willfully  mar  this  glorious  history  by  blaming  Ameri- 
cans therefor.  A  certain  measure  of  selfish  interest  is  bound  to  prevail 
over  public  interest  ^in  all  political  entities.  The  temptation  is  too  strong 
for  every  politician,  without  exception,  to  resist  it.  This  is  a  sad  but 
acknowledged  fact  the  world  over.  In  Costa  Rica,  however,  the  author  has 
found  a  strong  innate  sense  of  political  honesty  which  speaks  highly  of  the 
hereditary  Spanish  pride  characteristic  of  the  pure  Hidalgo  blood  flowing  in 
the  veins  of  their  statesmen.  Every  Costa  Rican  president  left  his  high 
office  poorer  than  when  he  assumed  it.     That  is  in  itself  sufficient  proof. 

The  country  was  far  from  agreeing  with  Don  Alfredo,  and  the  factors 
in  favor  of  the  American  oil  grant  were  in  no  way  limited  to  those  directly 
interested  as  owners  of  oil  lands  under  lease  to  the  concessionaire.  They 
included  practically  all  of  the  highly  respectable  personages  who  had  been 
prominent  in  Costa  Rican  history.  This  is  shown  by  the  following  align- 
ment of  the  more  important  elements  in  its  favor  and  those  siding  with 
Gonzalez'  plan  of  opposition. 

In  Favor  of  the  American  Oil  Rights. 

Ricardo  Jimenez,  the  president  of  Costa  Rica  preceding  Gon- 
zalez ;  a  prominent  lawyer ;  wealthy. 

Asencion  Esquivel,  former  president  of  Costa  Rica;  lawyer; 
wealthy. 

Cleto  Gonzalez  Viquez,  former  president;  prominent  lawyer; 
lucrative  practice. 

J.  J.  Rodriguez,  former  president;  prominent  lawyer;  wealthy. 

Dr.  Carlos  Duran,  former  president;  prominent  physician; 
wealthy. 

Bernardo  Soto,  former  president;  prominent  lawyer;  one  of 
the  wealthiest  men  in  Costa  Rica  (now  dead). 

Joaquin  Bernardo  Calvo,  for  23  consecutive  years  Costa  Rican 
Minister  in  Washington  and  dean  of  the  Diplomatic  Corps 
there  (now  dead). 

Luis  Anderson,  prominent  lawyer;  president  of  the  Central- 
American  Peace  Conference;  Treasurer  of  the  American 
Institute  of  International  Law;  diplomat;  writer. 

Roberto  Brenes-Mesen,  scientist;  writer;  philosopher;  idealist; 
Gonzalez'   Minister   Plenipotentiary  in  Washington. 


90 

Leonidas  Pacheco,  prominent  lawyer;  former  Cabinet  member; 

diplomat;  writer. 
La  Informacion,  the  oldest  and  most  prominent  pro-Ally  daily. 
La  Prensa  Libre,  pro-Ally  evening  paper. 
La  Linterna,  pro-Ally  comic  weekly. 
Over  1,000  Costa  Ricans  who,  by  leasing  their  oil  rights  to  the 

American  group,  had  acquired  a  royalty  interest. 

Opposed  to  the  American  Oil  Rights. 

Alfredo  Gonzalez,  pro-German  President  of  Costa  Rica. 
Manuel  Dieguez,  pro-German  lawyer  and  adviser  of  Gonzalez; 

representing  European  petroleum  interests. 
Manuel  Castro  Quesada,  Gonzalez'  chum  and  Washington  Min- 
ister. 
Johann  Kiimpel,  German  propagandist,  friend  and  associate  of 

Gonzalez  (on  our  black  list). 
Rogelio    Fernandez    Giiell,    pro-Hun    editor    of    the    Gonzalez- 

Kiimpel  Germanophile  paper  El  Imparcial  (now  dead) .    (On 

our  black  list.) 
El  Imparcial,  the  daily  just  referred  to.     (Suppressed  by  Tinoco. 

On  our  black  list.) 
La  Nueva  Era,  another  Hun-controlled  newspaper.    (  Suppressed 

by  Tinoco.     On  our  black  list.) 
A  small  group  of  satellites  favoring  Don  Alfredo's  policies. 

Let  us  now  go  through  the  former  President's  own  list  of  officials  who 
he  claims  were  "  bribed  and  corrupted  "  by  the  writer  and  discuss,  seriatim, 
the  most  prominent  among  them. 

Leonidas  Pacheco. — Publicly  retained  as  Chief  Counselor  by  the  Amer- 
ican interests.  It  is  true  that  he  was  President  of  Congress,  but  there  is  no 
more  reason  for  a  member  of  Congress  in  Costa  Rica  to  give  up  his  private 
practice  than  there  is  in  other  countries.  Pacheco  was  not  President  of 
Congress,  however,  and  did  not  vote  when  the  oil  concession  was  under 
discussion,  which  fact  in  itself  disposes  of  the  charge. 

Victo  Vargas. — It  is  correct  that  he  was  civil  judge,  but  the  American 
group  never  had  any  litigation  before  his  court.  He  was  never  called  upon 
to  decide  any  question  pertaining  to  the  petroleum  matter.  He  had  leased 
his  oil  lands  to  the  concessionaire  and,  after  he  had  ceased  to  be  judge,  was 
retained  in  one  instance  as  attorney. 

Manuel  Bejerano. — He  had  been  appointed  as  Attorney  General  by 
Gonzalez  himself  and  was  the  latter's  trusted  friend.  Bejerano  has  always 
been  considered  as  the  personification  of  honesty.    He  never  received  a  cent 


91 

from  the  grantee  or  his  agents,  owns  no  oil  land  and  fought  the  American 
group  bitterly  to  the  very  last,  upon  the  President's  instructions. 

Luis  Anderson. — He  acted  as  an  associate  counsel.  Neither  law  nor 
custom  prevented  him  from  exercising  his  profession,  after  he  became  a 
Congressman. 

Various  other  attorneys^  some  belonging  to  Congress,  who  had,  to  the 
knowledge  of  everybody,  been  retained  for  special  legal  duties.  The  title 
research  and  compilation  work  was  immense,  as  there  were  several  hundred 
titles  and  assignments  to  be  investigated  and  cleared,  with  only  a  few  months 
available  for  the  task.  Anyone  with  experience  in  Latin  America  knows 
what  that  means.  The  work  could  be  completed  in  the  specified  time  only 
by  dividing  it  among  a  number  of  attorneys. 

Federico  Tinoco,  until  a  few  weeks  ago.  President  of  Costa  Rica,  then 
Minister  of  War.  He  never  received  a  penny  from  the  American  interests, 
directly  or  indirectly,  and  was  always  considered  as  a  dangerous  opponent 
whose  ill-will  was  feared  when  he  became  President. 

Gonzalez  further  alleges  that  a  number  of  court  clerks,  ministerial  and 
presidential  employes  had  been  "bribed."  The  implication  is  ridiculous  on 
its  face.  What  tangible  advantage  could  be  derived  from  "  bribing  "  such 
underlings?  What  help  could  they  give?  It  is  quite  true  that  among  the 
thousand  or  more  Costa  Ricans  who  owned  oil  rights  there  were  govern- 
ment employees,  but  they  had  acquired  their  holdings  long  before  the  Amer- 
ican group  came  to  Costa  Rica,  and  their  lands  had  been  leased  by  the  latter 
on  the  same  terms  as  all  others,  without  discrimination.  It  is  also  a  fact 
that,  for  investigating  and  perfecting  the  titles  of  the  acquired  oil  zones,  the 
court  for  fiscal  matters  had,  at  times,  to  be  kept  open  all  night.  The  clerical 
w^ork  entailed  thereby  was  very  extensive,  and  it  is  natural  that  the  clerks 
were  entitled  to  and  did  receive  payment  for  such  special  overtime  services. 

As  to  Maximo  Fernandez,  the  other  President  of  Congress,  naively 
charged  by  Gonzalez  with  having  been  corrupted  by  the  writer,  the  shoe  is 
on  the  other  foot.  Fernandez  was  the  leader  of  the  party  which  had  lifted 
Don  Alfredo  into  his  high  office.  The  latter  and  many  of  his  friends  and 
Cabinet  appointees  also  belonged  to  it.  After  having  formed  the  pro-Ger- 
man, anti-American  combine  already  described,  Gonzalez  began  to  fear  the 
opposition  of  his  party  and  political  friends,  lest  they  should  refuse  to 
carry  out  plans  against  which  their  conscience  rebelled.  He  needed  a  club 
with  which  to  force  them  into  blind  obedience.  It  has  already  been  related 
how  Kiimpel,  the  "  Rasputin,"  hit  upon  a  convenient,  if  not  ethical,  plan 
to  accomplish  this  purpose ;  how  the  assets  of  the  Commercial  Bank  had  been 
pilfered  by  the  conspiring  ruler;  how  he  had,  finally,  secured  by  a  high- 
handed act  of  force  the  possession  of  notes  guaranteeing  his  party's  cam- 
paign debt ;  and  how  he  had  thereupon  relegated  to  the  scrap  heap  his  obliga- 


92 

tion  of  paying  that  outstanding  liability.  The  notes  seized  bore  the  signa- 
tures of  Fernandez,  the  President's  most  intimate  friends,  and — last  but  not 
least — his  own.  To  force  the  defeat  of  the  American  oil  rights  and  the  suc- 
cess of  his  other  plans,  Gonzalez  was  swinging  this  Damocles  sword  relent- 
lessly over  the  heads  of  his  influential  partisans. 

It  is  evident  from  the  mass  of  correspondence  on  which  this  booklet  is 
based  that  the  victims  so  threatened  required  an  effective  assurance  of  pro- 
tection, in  the  event  that  Don  Alfredo  should  carry  out  his  menace  and  ruin 
them  through  the  enforcement  of  the  notes.  Lacking  snch  guarantee,  they 
would  naturally  have  been  cowed  and  whipped  by  the  ruler  into  silent 
obedience,  and  the  European  oil  interests  favored  by  Gonzalez  would  have 
secured  the  permanent  control  of  the  strategic  petroleum  base  at  a  time  when 
the  Hun  military  successes  were  approaching  their  climax.  The  author  did 
therefore  the  only  plausible  thing  under  the  circumstances — ^by  extending 
to  the  blackmailed  politicians  a  written  assurance  protecting  them  against 
the  fall  of  the  sword.  This  guarantee,  given  in  October,  1916,  about  two 
months  after  the  ratification  of  the  American  grant,  was  for  no  other  pur- 
pose than  to  appease  the  startled  minds  of  the  honorable  Costa  Ricans  af- 
fected by  Gonzalez'  Prussianized  threat. 


^♦» 


93 


PRESIDENT  TINOCO'S  TESTIMONY. 

Costa  Rican  Congress  Unanimously  Rejects  Gonzalez'  Charges  as 

Baseless  and  Untrue. 

In   connection   with   the   Gonzalez   publicity   campaign   the    following 
document  is  interesting: 

From  La  Gaceta  (official  daily),  No.  110, 
Friday,  November  8,  1918. 


"  Constitutional  Congress. 
"  Fifth  Special  Session. 

''Joint  Session  of  Both  Chambers  at  4.20  P.  M.,  October  28,  1918. 

Article  II. 

'*  The  President  of  Congress  stated  that  the  President  of  the 
Republic  was  in  the  Office  of  the  Secretary  for  the  purpose  of  at- 
tending the  Session.  That  high  official  was  immediately  introduced 
with  the  customary  honors  into  the  hall  of  the  National  Assembly  and 
seated  at  the  right  of  the  President  of  the  Chambers. 

"  The  First  Magistrate  of  the  Republic  said  that  it  was  his  cus- 
tom to  report  to  Congress  every  matter  of  transcendental  importance 
to  the  nation  and  that  his  presence  among  the  representatives  of  the 
people  was  in  obedience  to  this  motive.  *  *  * 

"  With  regard  to  the  political  matter  which  brought  him  before 
these  Chambers,  President  Tinoco  stated  that  '  since  former  Presi- 
dent Gonzalez  Flores  had  left  Costa  Rica,  it  was  notorious  that  he, 
as  well  as  his  former  minister,  Castro  Quesada,  had  devoted  them- 
selves to  the  thankless  task  of  discrediting  their  nation  in  other  coun- 
tries, employing  for  that  purpose  as  principal  weapons  lies  and 
defamation,  besides  a  persistent  and  constant  press  campaign  through 
which  they  gave  themselves  importance  by  publishing  articles  which, 
beyond  a  doubt,  have  all  been  written  by  the  same  hand. 

"  *  I  would  not  bother  about  these  matters,'  he  said,  '  were  it 
not  that,  from  personal  questions,  they  have  drifted  into  defamation 
of  the  nation  and,  in  this  case,  I  am  obliged  for  the  honor  of  the 
Republic  and  in  defense  of  the  prestige  of  the  country  and  its  repre- 
sentatives, to  protest  most  solemnly  and  energetically  against  this 
unhealthy  campaign. 

" '  I  shall  refer  briefly  to  the  political  events  after  January  27, 
1917,  which  events,  as  all  of  the  Senators  and  Deputies  know,  the 


94 

North  American  Senate  has  been  investigating  by  virtue  of  a  formal 
accusation  wherein  an  attempt  was  made,  through  false  witnesses, 
to  show  that  I  had  received  $50,000  from  Mr.  Valentine  to  aid  in  the 
expense  of  the  movement  of  January  27. 

"  '  The  whole  country  knows  and  the  representatives  of  the  peo- 
ple know  the  procedure  in  that  petroleum  business  in  which  I  had 
no  intervention.  For  the  purpose  of  refreshing  your  ideas  and  con- 
densing the  facts  so  as  to  fully  bring  out  the  truth,  it  is  advisable  that 
we  study  briefly  the  history  of  the  matter  with  documents  in  hand. 

"  *  On  September  23,  1915,  there  was  signed  and  approved  a 
contract  by  the  President  of  the  Republic,  Alfredo  Gonzalez,  and  the 
Minister  of  Fomento,  Mr.  Enrique  Pinto,  on  the  one  hand,  and  Mr. 
Leo  Greulich  on  the  other. 

" '  On  May  9,  1916,  the  said  contract  was  sent  to  Congress  by 
the  Executive  and  the  Minister  of  Fomento. 

^  "  '  On  August  12,  1916,  Decree  No.  51  was  issued  by  Congress, 
approving  the  said  contract  signed  by  the  Executive. 

"  '  On  August  21  of  that  year.  President  Gonzalez-Flores  pre- 
sented to  the  Chamber  a  note  of  remarks  wherein  he  stated  that  the 
Decree  would  not  receive  the  sanction  of  the  Executive  power  and 
proposed  at  the  same  time  another  decree  for  the  rejection  of  the 
contract. 

"  '  On  September  5,  1916,  the  President  of  Congress,  Dr.  Maximo 
Fernandez,  ordered  the  publication  of  Decree  No.  51,  approving  the 
Pinto-Greulich  contract  because  it  was  a  law  of  the  Republic  and 
not  vetoed  in  accordance  with  the  Constitution. 

"  '  On  September  16,  President  Gonzalez-Flores  refused  to  pub- 
lish Decree  No.  51  and  offered  to  convene  Congress  in  special  session 
to  define  the  matter. 

" '  On  October  28  he  convened  Congress  to  discuss  the  veto  to 
the  Pinto-Greulich  contract,  and  in  the  Gazette  of  November  12  of 
the  same  year  the  contract  was  published  as  a  law  of  the  Republic. 
The  Official  Gazette  of  that  date  published  Decree  No.  1  issued  by 
Congress  on  November  10,  wherein  the  publication  of  Decree  No. 
51  was  ordered,  for  its  legal  efifects. 

" '  These  eloquent  dates  are  evidence  that,  when  I  assumed  the 
power,  the  petroleum  business  referred  to  was  already  concluded 
and  a  law  of  the  Republic  and  that,  therefore,  Mr.  Valentine  would 
have  had  no  reason  for  placing  in  my  hands  any  money  for  the  evolu- 
tion of  the  27th.    *     *     * 

"'While  during  that  period  I  formed  part  of  the  Cabinet  of 
Mr.  Gonzalez-Flores,  nobody  can  say  that  I  in  any  way  recommended 
the  approval  of  the  petroleum  contract. 

"Gonzalez-Flores  now  alleges  that  the  evolution  of  January  27 


95 

was  aided  with  the  money  of  the  contractor,  Mr.  Valentine,  but  this 
is  a  stupidity  and  it  is  malicious  to  even  think  so. 

"  '  I  wish  to  repeat  that,  during  my  administration,  neither  I  nor 
any  influential  element  of  my  Government  had  any  kind  of  poHtical 
or  commercial  connection  with  Mr.  Valentine. 

"  '  This  is  a  case.  Representatives,  where  the  honor  of  Costa 
Rica  is  being  soiled  in  a  foreign  country  by  none  less  than  a  citizen — 
a  bad  citizen — who  has  been  President  of  the  Republic — and  this  is 
extremely  sai. 

" '  Now,  gentlemen,  by  reason  of  these  circumstances,  I  am 
obliged  to  recall  the  history  that  concerned  the  motives  which  com- 
pelled me  to  proceed  as  I  did  on  January  27.  There  are  important 
details  in  the  matter  which  few  persons  know  and  which,  modesty 
aside,  it  is  necessary  for  the  country  to  be  informed  of.  Do  not 
take  these  declarations  as  the  creatures  of  passion,  because  I  am  far 
from  feeling  such  unhealthy  sentiments  and,  if  I  now  dwell  upon 
these  matters,  I  am  obliged  to  do  so  by  imperative  circumstances. 

*' '  I  shall  be  brief — very  brief — and  in  my  statements  I  shall 
have  to  go  back  to  the  time  of  the  electoral  campaign  which  pre- 
ceded our  last  one,  as  heated  and  bitter  a  campaign  as  few  recorded  in 
the  history  of  our  country. 

"  *  I  was  a  Republican  and  fought  with  vim  and  patriotism  for 
the  triumph  of  the  ideals  of  that  party.  I  was  the  one  who  most 
strongly  opposed  the  combination  arising  at  the  last  hour  between  it 
and  the  Civil  Party,  and  I  always  devoted  my  entire  efforts  and 
energy  to  breaking  up  that  combination. 

"  *  Nobody  can  say  that  I  visited  the  house  of  the  candidate  of 
the  Civil  Party,  nor  that  I  had  any  conference  with  him. 

"  '  To  cause  the  failure  of  that  political  plan,  I  had  on  January 
8,  1914,  a  conference  with  former  President  Gonzalez  Viquez  in  the 
office  of  Mr.  Baudrit,  who  is  today  Senator  and  now  present,  for  the 
purpose  of  reaching  an  agreement  with  the  Duranists,  which  was  later 
carried  out  and  resulted  in  the  assumption  of  power  by  Mr.  Gonzalez- 
Flores  who,  in  those  days,  I  had  in  my  house,  you  might  say,  hidden. 
In  his  incomprehensible  political  incapability,  he  always  doubted  that 
the  matters  were  serious.  He  did  not  beheve  in  success  because  it 
never  entered  his  imagination  that  he  might  rise  to  the  position  of 
President  of  the  Republic. 

"  '  His  peculiar  lack  of  faith  in  the  matter  went  so  far  that, 
thinking  it  was  all  a  joke,  he  declined  on  April  27  to  receive  in  my 
house,  where  he  had  remained,  the  delegates  of  the  Duranists,  Mr. 
Leonidas  Pacheco  and  Mr.  Ernesto  Martin,  representing  seventeen 
Deputies  who,  added  to  the  five  Republicans,  gave  him  the  triumph. 


96 

"  '  I  then  had  to  impose  myself  upon  him  to  make  him  accept 
his  designation  as  presidential  compromise  candidate,  and  it  was 
through  me  that  he  accepted  because  he  almost  believed — I  repeat  it — 
that  he  was  being  made  a  plaything. 

" '  On  the  night  of  that  historical  political  event,  when  former 
President  Jiminez  decided  to  guarantee  the  election,  all  the  armed 
forces  of  the  Republic  were  placed  at  my  disposal,  and  it  was  I  who 
made  Gonzalez-Flores  President  of  the  RepubHc.  The  troops  on 
that  night  shouted  "  Vivas  "  for  me,  and  that  sarpe  night  I  said  to  the 
troops,  "These  '  vivas  '  must  be  for  Mr.  Gonzalez-Flores." 

" '  This  is  how  Mr.  Gonzalez-Flores  attained  the  presidency  and, 
immediately,  he  proceeded  to  break  the  obligations  which  he  had  con- 
tracted with  all  of  the  parties.  He  began  with  the  Duranists  and 
then  continued  with  the  Republicans.  And  then  with  his  closest 
friends.  He  was  going  to  exile  me.  I  fell  into  disgrace  before  the 
rare  caprices  of  that  Governor  because  I  did  not  agree  with  many  of 
his  political  ideas.  Hozv  could  I  agree  with  him  when,  in  economic 
matters,  the  country  was  handled  by  the  German  Kiimpel  and,  in 
Public  Works,  by  the  German  Fetters? 

"'In  other  words,  the  two  most  important  branches  of  the  public 
administration  were  subject  to  the  caprices  and  decisions  of  tzvo  for- 
eign enemies  of  this  country,  because  the  nation  has  been  and  is,  zvith 
soul  and  body,  truly  and  heartily  in  favor  of  the  Allies. 

"  The  Fro-Germans  were,  therefore,  disposing  of  the  country's 

fate.    They  zvere  the  ones  who  governed — who  made  and  unmade — 

who  conducted  the  country  towards  an  unsoundable  abyss.    Before 

this  terrible  danger,  the  nation  trembled  with  horror. 

"I  proceeded  therefore  conscientiously  to  save  the  country. 
*     *     * " 


The  President  thereupon  moved  that  the  Chambers  in  joint  session 
name  a  Committee  to  investigate  the  charge  of  Alfredo  Gonzalez  that 
the  overthrow  of  former  President  Gonzalez  had  been  financially  aided 
by  Mr.  Valentine.  The  motion  was  submitted  to  a  vote  and  it  was  unan- 
imously decreed  that  there  was  no  reason  for  naming  a  Committee  because 
everyone  present  was  fully  aware  from  his  own  personal  knowledge  that 
the  charge  zvas  absolutely  untrue. 


4»» 


97 


THE  AMERICAN  SENATE  AND  THE  CASE  OF  COSTA  RICA. 

The  Costa  Rican  matter  was  finally  submitted  to  the  United  States 
Senate  and  referred  to  a  subcommittee  composed  of  the  following:  Sena- 
tors Williams,  Saulsbury  and  Swanson,  Democrats;  Senators  Lodge  and 
Brandegee,  Republicans.  The  writer  was  in  Costa  Rica  at  the  time  and 
at  once  sent  the  following  cables : 

"November  24,  1918.  Inform  Senate  Committee  Gonzalez 
allegation  regarding  our  alleged  financial  assistance  Gonzalez  over- 
throw outrageous  lie,  easily  disproved;  part  systematic  intrigue 
deceive  American  Government  and  besmirch  honorable  Americans. 
Will  submit  conclusive  evidence.  Anxious  proceed  Washington 
immediately  testify." 

"  December  4,  1918.  Will  submit  Senate  documentary  evidence 
showing  conclusively  no  connection  existed  Tinoco  Valentine,  and 
Gonzalez  allegation  cleverly  framed  but  absurd  lie.  Will  unmask 
Gonzalez  supplying  documents  showing  his  pro-Germanism  and 
active,  persistent  aid  to  German  Government  interests.  Will  also 
show  his  anti-Americanism  and  tricky  efforts  appear  pro-Ally  when 
he  needed  Washington  backing,  and  his  unscrupulous  attempt  deceive 
American  Government,  Senate  and  public  for  that  purpose.  Leaving 
first  steamer  with  documents." 

On  January  29th  of  this  year,  the  sub-committee  reported,  unanimously 
recommending  that  the  United  States  Government  recognize  Tinoco,  as 
the  investigations  had  disclosed  nothing  on  which  a  continued  suspension  of 
diplomatic  relations  could  be  based. 

Not  only  did  our  Government  pay  no  attention  to  this  Committee 
Report  but  nothing  effective  was  done  to  prevent  the  Gonzalez  faction 
from  organizing  its  revolutionary  activities  in  Nicaragua,  a  quasi-pro- 
tectorate  of  the  United  States.  Tinoco  was  obliged  to  keep  an  army 
mobilized  to  defend  himself  against  aggression  from  that  neighbor,  thereby 
greatly  draining  the  public  treasury.  Finally,  an  assassin,  presumably  sent 
from  Nicaragua,  shot  and  killed  Joaquin  Tinoco,  the  President's  brother 
and  War  Minister,  thereby  depriving  the  Government  of  its  real,  physical 
leader.  There  remained  for  Tinoco  to  do  one  of  two  things;  either  con- 
tinue to  defy  our  State  Department  and  ultimately  meet  his  brother's  fate, 
or  to  throw  up  his  hands.  He  followed  the  latter,  saner  course,  by  departing 
for  Europe,  after  delivering  the  presidency  into  the  hands  of  a  designate, 
Juan    Bautista    Quiros,    a    worthy    intelligent   business    man   of    integrity. 


98 

educated  in  the  United  States  and  strongly  pro-American.  Tinoco's 
administration  had  lasted  two  years  and  a  half,  in  open  defiance  of  what 
he  considered  President  Wilson's  unjustified  dictum. 

As  reported  by  the  Associated  Press  on  August  22nd,  1919,  President 
Wilson's  present  Costa  Rican  policy  is  drastic. 

"  President  Juan  Bautista  Quiros  of  Costa  Rica,  successor  of 
Federico  Tinoco,  has  been  notified  by  the  American  Government  that 
the  validity  of  the  Tinoco  Constitution  or  any  Government  acting 
under  that  Constitution,  would  not  be  recognized  by  the  United 
States.  Ex-President  Gonzalez  has  been  informed  by  the  State 
Department  of  this  action.  He  has  been  in  Washington  since  his 
overthrow  by  Tinoco  and  has  been  in  close  touch  with  the  revolu- 
tionary movement  against  the  Tinoco  regime,  headed  by  Julio  Acosta, 
Minister  of  Foreign  Afifairs,  under  Gonzalez." 

In  other  words,  Costa  Rica  reverts  once  more  to  its  status  of  January 
27,  1917,  when  President  Gonzalez  was  overthrown,  and  *  *  *  ^A^ 
latter  has  been  so  informed  by  our  Government.  This  implies  the  decided 
recognition  that  Alfredo  Gonzalez,  now  in  Washington,  or  a  designate  of 
his  administration,  is  acknowledged  by  our  Government  as  President  of 
Costa  Rica.  Therefore,  our  State  Department  considers  once  more  the  anti- 
American,  pro-German  group  of  Gonzalez,  Kiimpel,  Fetters,  Dieguez,  etc., 
described  in  this  booklet  by  its  acts,  as  the  Government  of  that  victimized 
country. 

The  mysteries  of  our  Latin  American  policies  in  recent  years  are 
indeed  unsoundable. 

CompHcations  are  bound  to  arise  under  these  circumstances.  President 
Wilson  recognizes  no  act  under  the  Tinoco  Constitution  or  the  Tinoco 
regime.  This  nullifies  the  present  Costa  Rican  Congress  and  Courts  and 
all  acts  performed  by  them  in  the  last  two  and  a  half  years.  It  also  licenses 
the  Gonzalez  group  to  resume  its  anti-American  activities  by  impeding  the 
development  of  those  American  interests  to  which  it  has  been  antagonistic. 
It  leaves  the  road  open  to  numerous  diplomatic  claims,  and  American  inter- 
ests are  liable  to  be  confronted  with  a  serious  situation.  Their  ulitmate 
recourse  against  Gonzalez  is  Washington  and  Washington  apparently  favors 
Gonzalez. 

How  about  the  rights  of  citizens  of  the  twenty-two  countries  which 
recognized  Tinoco  and  had  diplomatic  relations  with  him? 

How  about  the  rights  granted  by  Tinoco  to  strong  British  interests 
which  have  invested  large  amounts  of  money?  Will  Great  Britain  stand  for 
her  subjects  being  thus  victimized?  Our  Government  cannot  possibly  intend 
to  recognize  the  validity  of  rights  granted  to  citizens  of  Great  Britain  and 
other  large  states  and  sacrifice  rights  granted  to  citizens  of  the  United 


i 


99 

States  and  small  countries  ?  Or  will  the  policy  be  one  of  arbitrary  discrim- 
ination, recognizing  such  acts  of  the  Tinoco  regime  as  suit  the  whim  of  our 
Administration  and  relegate  all  others  to  the  scrap  heap? 

Let  us  analyze  one  case  in  point,  which  is  best  illustrated  by  extracts 
from  the  writer's  letter  of  June  14,  1918,  to  the  Hon.  Stewart  Johnson, 
American  Charge  d'Affaires  in  Costa  Rica. 

"  Fourth  Attempt  of  the  Pearsons  in  Costa  Rica. 

"  On  May  6,  1918,  Mr.  Federico  Tinoco,  exercising  the  functions 
of  President  of  Costa  Rica,  signed  a  contract  with  John  M.  Amory 
&  Son  of  New  York  for  the  exclusive  oil  control  of  the  four  remain- 
ing provinces.     .     .     . 

"  There  is,  therefore,  hardly  any  doubt  that  again  John  M. 
Amory  &  Son  are  acting  merely  as  agents  for  British  inter- 
ests.    .     .     . 

"  Besides,  the  Amory  contract  calls  for  deposits  of  pounds 
sterling  in  an  English  bank,  and  no  mention  is  made  of  anything 
connected  with  the  United  States,  such  as  formation  of  company, 
etc.     .     .     . 

*'  It  is  worthy  of  note  that  the  Amory  contract  calls,  not  only 
for  the  control  of  the  sub-soil,  that  is  to  say,  oil  exploitation,  but 
that  it  covers  large  sections  of  the  surface  of  the  four  provinces  as 
well,  in  such  a  manner  that  the  Government  of  Costa  Rica  obligates 
itself  not  to  grant  in  the  future  any  surface  rights  in  the  said 
provinces  which  Amory  &  Son  may  desire. 

"  Besides  the  contract  covers  practically  all  of  the  coal  resources 
of  the  four  provinces  mentioned. 

"  The  term  is  for  fifty  years,  renewable  for  another  fifty 
years.     . 

"  The  Alajuela  Province  included  in  the  contract  adjoins  more 
than  half  of  the  San  Juan  River,  which  constitutes  the  proposed 
Nicaragua  Canal  route. 

"  The  contract  mentioned  grants  to  Amory  &  Son,  among  other 
things,  the  unlimited  and  uncontrolled  right  to  build  canals,  wharves, 
lighthouses,  etc.,  as  well  as  the  unlimited  and  uncontrolled  right  of 
navigation  of  rivers  and  other  waters. 

"In  other  words,  the  co-riparian  rights  which  Costa  Rica 
undoubtedly  has  to  the  San  Juan  River  are  granted  to  Amory  & 

Son,  in  part. 

"  Summary. 

"  S.  Pearson  &  Son  acted  in  1913  in  Colombia  through  Saturnino 
Restrepo,  of  London.    S.  Pearson  &  Son  acted  in  1913  in  Costa  Rica 


100 

through  Wencislao  de  la  Guardia,  brother-in-law  of  Mr.  Federico 
Tinoco,  now  exercising  the  functions  of  President  of  Costa  Rica. 
Saturnino  Restrepo  is  the  main  element  back  of  the  Aniory  &  Son 
contract.  Dr.  Eduardo  Uribe,  representing  and  championing  Amory 
&  Son,  acknowledges  that  he  acts  for  Saturnino  Restrepo,  his  first 
coaisin  and  friend.  The  new  Amory  contract  covers  important  rights 
to  the  proposed  Nicaragua  (^anal  route,  as  well  as  the  absolute  control 
for  fifty  years,  renewable,  of  the  coal  and  oil  resources  of  one-third 
of  Costa  Rica,  and  especially  the  probable  oil  zones  adjacent  to  the 
proposed  Nicaragua  Canal. 

"  Conclusion. 

"  The  Amory  contract  is  now  before  Congress.  The  Congres- 
sional Committee  of  Public  Works,  in  spite  of  being  informed  of 
the  strategic  features  that  the  contract  contains,  has  unanimously 
recommended  its  approval.  The  Chamber  of  Deputies,  in  its  session 
of  June  13,  1918,  has  approved  the  report.  The  contract  will  prob- 
ably come  up  for  second  reading  to-day,  June  14th ;  for  third  and 
final  reading  probably  next  Tuesday,  June  18th,  and  for  detailed 
discussion  next  Wednesday,  June  19th. 

"  I  have  no  personal  interest  in  favor  of  or  against  the  contract. 
I  understand  that  the  Sinclair  Central  American  Oil  Corporation 
has  no  interest  in  favor  of  or  against  it,  because  it  does  not  conflict 
with  its  contract. 

"  I  am  submitting  these  facts,  merely  because  I  deem  it  my  duty 
to  do  so  at  this  particular  moment.  I  do  not  know  whether  the 
United  States  Government  has  changed  its  policy  since  1913  and 
whether  there  is  any  desire  to  prevent  Great  Britain  from  securing 
strategic  advantages  in  these  sections.  One  fact  appears  certain  to 
me,  however :  that  John  M.  Amory  &  Son  are  acting  for  British 
interests." 

On  June  24th,  1918,  the  author  wrote  to  the  Honorable  Stewart 
Johnson: 

"  Enclosed  herewith  please  find  the  following : 

''Two  sets  of  photographs  of  letter  from  Saturnino  Restrepo, 
London,  England  (associate  of  S.  Pearson  &  Son,  of  London),  to 
Dr.  Eduardo  Uribe  (cousin  of  the  former  and  representative  of  John 
M.  Amory  &  Son). 

"  Three  plain  copies  of  the  same. 

"  Three  English  translations  of  the  same. 

"  The  original  of  the  document  is  in  my  hands. 

"  It  proves  the  following  facts  in  the  most  lucid  and  conclusive 
manner: 


101 

"  John  M.  Amory  &  Son  is  not  the  principal  in  the  matter 
of  the  petroleum  matter  between  it  and  the  Tinoco  Government 
(see  a  red  mark  on  photograph  '1'). 

"  John  M.  Amory  &  Son  is  merely  acting  as  agent  for  and  under 
direct  instructions  from  strong  British  interests  with  headquarters 
in  London  (red  mark  '1'). 

"  Saturnino  Restrepo  has  been  for  years  associated  with  S. 
Pearson  &  Son,  and  introduced  its  business  in  Colombia  in  1913. 

"  S.  Person  &  Son  tried  various  times  since  1913,  first  in  its 
o^vn  name  and,  upon  being  opposed  by  the  United  States  Government, 
through  agents,  to  secure  vast  Costa  Rican  oil  territories.  Hence 
the  British  interests  referred  to  must  be  S.  Pearson  &  Son. 

"The  Amory  petroleum  contract  was  worked  out  in  London, 
mainly  under  the  direction  of  Saturnino  Restrepo,  and  sent  in  a 
definitely  approved  form  to  John  M.  Amory  &  Son,  referred  to 
as  the  ^American  Agents  '  of  the  British  interests  mentioned  (see  red 
mark  '2'). 

"  The  British  principals  found  it  expedient  to  display  cash  money 
in  Costa  Rica,  so  as  to  make  'interested  parties  feel  it'  (see  red 
mark  '3'). 

"  Provision  seems  to  have  been  made  to  pay  seventy-five  thou- 
sand pounds  sterling  for  obtaining  the  concession.  Twenty  thousand 
pounds  were  to  have  been  spent  for  exploration  work  during  the 
first  two  years;  five  thousand  pounds  to  be  paid  to  the  Government 
as  a  guarantee  fund ;  but,  '  after  such  expenditures  of  twenty  thou- 
sand and  five  thousand  pounds,  a  total  of  one  hundred  thousand 
pounds  will  have  been  invested  by  the  firm'  (see  red  mark  H'). 
The  difference  of  seventy-five  thousand  pounds  must  evidently  be 
destined  to  be  the  price  to  be  paid  far  the  concession. 

"  Dr.  Uribe  apparently  asked  that  a  part  of  the  said  amount  be 
advanced.  But  the  British  firm  is  opposed  thereto,  preferring  to 
pay  the  total  amount  after  securing  the  concession  (see  red  mark 
'5'). 

"  Saturnino  Restrepo  states  that  he  has  handled  the  whole  matter 
from  the  beginning,  evidently  referring  to  the  Pearson  endeavors  in 
Costa  Rica  since  1913  (see  red  mark  *  6  '). 

"British  interests  are  also  endeavoring  to  secure  the  oil  lands 
of  Nicaragua  (see  red  mark  '7'). 

"The  Amory  petroleum  concession  (Pearson  concession)  has 
been  approved  in  three  readings  by  the  Chamber  of  Deputies.  There 
was  almost  no  discussion,  the  majority  of  the  Congressmen  favoring 
the  approval  of  the  said  contract  without  amendments. 

"  The  concession  is  now  in  detailed  discussion,  article  by  article. 


102 

"If  Mr.  Federico  Tinoco,  acting  as  Executive  of  Costa  Rica, 
could  be  induced  to  use  his  unquestioned  influence  upon  a  majority 
of  the  Deputies  and  Senators,  he  could  avail  himself  of  Article  87, 
Clause  5,  of  the  new  Costa  Rican  Constitution,  by  having  the  contract 
submitted  to  the  Senate  and  there  defeated. 

"  Or  else,  a  clause  could  be  introduced  prohibiting  John  M. 
Amory  &  Son  from  selling,  transferring  or  leasing  the  concession 
or  granting  the  usufruct  thereof,  directly  or  indirectly,  to  any  but 
American  interests."  * 

Our  Legation  finally  received  a  cable  from  the  State  Department, 
re-affirming  its  policy  that  none  but  strictly  American  interests  should  be 
permitted  to  secure  oil  and  other  strategic  rights  adjacent  to  the  inter-oceanic 
canal  routes.  Our  Charge  d'Affaires  thereupon  communicated  with  the 
Costa  Rican  Government,  through  Joaquin  Tinoco  the  Vice-President  and 
Minister  of  War,  in  an  attempt  to  prevent  the  approval  of  the  grant  to  the 
British.     But  it  was  too  late,  as  Congress  had  already  ratified  the  concession. 

British  interests  undoubtedly  considered  their  Tinoco  grant  as 
valid  and  have  invested  large  sums  of  money  in  the  development  of  the 
proposition.  The  following  cable  from  London,  of  September  21,  1918, 
illustrates  that  point: 

"  Inform  the  Government  that  the  financial  papers  of  London 
announce  today  that  the  refunded  bonds  of  Costa  Rica  rose  one 
point  as  a  consequence  of  the  notice  circulated  with  respect  to  the 
petroleum  concession  granted." 

The  Monroe  Doctrine  evidently  did  not  deter  British  interests  from 
securing  strategic  rights  in  the  important  Nicaragua  Canal  zone;  nor  did 
President  Wilson's  non-recognition  of  the  Tionco  regime.  However, 
American  citizens  were  prevented  from  dealing  with  Tinoco,  under  the 
threat  of  the  State  Department,  in  its  announcement  of  February,  1917, 
published  in  this  expose,  that  our  Governm^ent  would  neither  sanction  nor 
protect  dealings  of  American  citizens  with  the  Tinoco  Government. 

Will  President  Wilson  now  insist  that  the  British  ail  concession  is  void 
for  being  an  act  of  Tinoco?  Will  the  British  Government  consent  to  her 
subjects  losing  these  valuable  strategic  grants  and  the  money  invested 
therein?  Or  will  the  rights  of  Europeans  and  other  Nationals  be  recognised 
for  the  sake  of  good  feeling  to  the  detriment  of  American  investors,  zvho 
were  deterred  from  competition  and  expansion  by  the  State  Department 
threat  f 


#•» 


103 


CONCLUSION. 

A  More  Practical  Latin  American  Policy  Is  Needed,  Protecting  Our 
Citizens  and,  at  the  Same  Time,  Aiding  Our  Continental 

Neighbors. 

The  case  just  related  covers  a  period  directly  following  President 
Wilson's  Mobile  spe'ech  of  1913  wherein,  by  arguing  against  the  granting 
by  Latin  American  governments  of  special  concessions,  he  announced  a 
departure  from  the  established  Republican  policy  and  enunciated  a  new 
doctrine  tending  to  the  estabhshment  of  ties  with  Latin  America,  not  based 
upon  common  interest  but  upon  common  understanding.  President  Gonzalez 
has  stated  more  than  once  that,  in  blocking  the  American  oil  and  other 
interests,  he  was  acting  in  accordance  with  the  new  Wilson  policy  which 
he  considered  gave  him  license  to  deliver  into  European  hands  concessions 
which  did  not  fit  into  the  Wilson  classification  of  enterprises  deserving  the 
good-will  of  the  Stars  and  Stripes.  This  feature  is,  in  itself,  a  practical 
proof  that  our  President's  ideaHstic  aims  have  been  peculiarly  and  con- 
veniently interpreted  by  some  of  the  smaller  Latin  leaders. 

Practically  all  large  investments  in  the  little  Republics  to  the  south  of 
us  require  such  special  grants  as  Mr.  Wilson  is  opposed  to,  as  the  only 
possible  safeguard  against  prohibitive  legislation.  It  is  obvious,  therefore, 
that  our  southward  industrial  expansion  will  seriously  suffer,  unless  our 
Government  makes  it  clear  in  words,  more  direct  and  concise  than  diplo- 
matic and  idealistic,  that  the  Stars  and  Stripes  follows  citizens  to  distant 
shores  as  closely  as  the  Union  Jack. 

If  it  is  to  the  interest  of  our  country  that  American  business  expand 
into  the  Latin  American  nations;  that  the  prestige  of  American  citizens 
devoting  their  energies  to  that  purpose  be  upheld ;  that  legitimate  American 
enterprises  be  given  sufficient  protection  to  save  them  from  undue  inter- 
ference— then  it  should  be  made  known  categorically  that  an  American 
venturing  out  of  his  country  upon  legitimate  industrial  or  commercial  pursuit 
is  not  an  outcast ;  that  the  United  States  Government  will  not  stand  for  his 
being  harassed  and  persecuted ;  that  the  spirit  of  Roosevelt  is  not  dead. 

We  with  our  Executive  all  long  for  a  gradual  betterment  of  the  world, 
for  a  final  Utopian  reign  of  mutual  help  and  understanding  above  self- 
interest.  The  present  world  turmoil  shows  too  clearly,  alas,  that  mortals 
will  still  be  mortals.  Perfection  cannot  be  improvised,  nor  can  it  be  imposed 
upon  the  world.  It  can  only  come  through  centuries  of  slow  evolution.  Any 
attempt  to  suddenly  squeeze  humanity  into  a  tight  coat  of  goodness  will 
only   stimulate  the   desire   for  an  easier  and  more   comfortable  garment. 


104 

Latin  Americans  are  sensitive.  The  smaller  the  country,  the  greater  its 
national  pride  and  fear  of  the  powerful  neighbor.  They  do  not  want  to 
be  told  what  to  do  and  what  not  to  do.  They  justly  resent  interference 
in  their  internal  affairs.  With  what  right  do  we  treat  them  as  irresponsible 
minors  subject  to  our  guardianship?  With  what  right  do  we  insist  upon 
one  man  being  placed  in  the  presidency  rather  than  another ;  which  consti- 
tution to  be  adopted ;  how  they  shall  spend  their  money     .     .     .  ? 

Let  us  help  them,  by  all  means !  But  let  us  help  them  as  adults,  not  as 
children.  Let  us  not  feed  them  wonderfully  phrased  promises  and  general- 
ities, whilst  their  commerce  and  industries  are  stagnant  for  want  of  capital. 
Their  countries  contain  untold  riches  the  surface  of  which  has  hardly  been 
scratched.  There  is  timber  aplenty,  at  a  time  when  Europe  is  in  sore  need 
of  it.  There  are  immense  iron  deposits,  untouched  because  no  roads  lead 
to  them.  There  are  millions  of  acres  of  wheat,  sugar,  rice  lands  which  lie 
waste  for  want  of  borrowing  and  transportation  facilities.  Let  us  be  prac- 
tical and,  instead  of  words,  feed  them  dollars — such  dollars  to  be  spent 
under  the  direction  of  a  mixed  commission  controlled  by  Americans  and 
to  be  devoted  solely  to  the  opening  up  and  development  of  the  smaller 
republics. 

Let  our  Government  give  every  facility,  and  use  its  good  offices  so 
that  the  southern  republics  give  facilities  in  return,  for  inducing  American 
capitalists  to  fearlessly  venture  into  their  sphere.  But  let  us  make  it  plain 
that  such  ties  of  common  interest  are  based  upon  the  common  understanding 
that  intrigues  as  the  one  exposed  in  this  booklet  will  not  be  tolerated. 


♦  •» 


105 


APPENDIX  I. 


On  February  25,  1919,  the  Hon.  Norman  J.  Gould  presented  a  resolution 
in  the  House  of  Representatives,  as  follows : 

(See  Congressional  Record  of  February  27,  1919.) 

Mr.  Gould — Mr.  Speaker,  I  have  today  introduced  a  resolution 
directing  the  House  Committee  on  Foreign  Affairs  to  investigate  the 
present  situation  in  Costa  Rica  and  the  Government's  connection  there- 
with. 

I  have  taken  this  step  because  of  information  which  recently 
has  come  to  me  and  which,  if  truthful,  indicates  the  existence  of  a 
situation  in  that  Republic  and  of  a  diplomatic  policy  on  the  part  of 
this  Government  which  is  so  repugnant  to  our  traditions  and  previous 
policies  as  to  call  for  prompt  explanation  on  the  part  of  the  Depart- 
ment of  State  and  full  and  free  discussion  in  Congress. 

Personally  I  can  not  vouch  for  all  of  the  facts,  or  alleged  facts, 
that  have  been  brought  to  my  attention ;  and,  due  to  the  unfortunate 
policy  of  the  State  Department,  as  a  result  of  which  Americans  seem 
to  forfeit  their  rights  to  the  protection  of  their  Government  when 
they  venture  into  Latin  American  countries  in  the  pursuit  of  foreign 
trade  and  commerce.  I  do  not  now  feel  at  liberty  to  give  the  House 
the  names  of  my  various  informants.  This  much,  however,  I  will 
state  on  the  strength  of  my  own  observation : 

"  The  political  plague  born  in  the  State  Department,  reared  in 
its  recently  acquired  atmosphere  of  paternal  idealism  and  pride-stifling 
internationalism,  which  has  wrecked  peaceful,  prosperous  Mexico  in 
the  last  eight  years,  now  seems  to  threaten  not  only  Costa  Rica  but 
all  of  Central  America." 

Articles  in  both  Washington  and  New  York  newspapers  recently 
exposed  a  very  serious  condition  of  unrest  extending  virtually  from 
the  Rio  Grande  to  the  Panama  Canal.  It  would  appear  that  this  con- 
dition is  merely  the  natural  and  inevitable  result  of  a  policy  toward 
Costa  Rica  strikingly  similar  to  the  policy  which  has,  in  my  belief, 
been  so  terribly  exemplified  in  the  case  of  Mexico.  Ba»croft  Ubraiy 

For  more  than  eighteen  months  President  Tinoco,  of  Costa  Rica, 
has  been  refused  recognition  by  this  Government.  The  reasons  which 
prompted  the  refusal  are  not  now  known  and  never  have  been  known 
to  the  public.  The  results,  however,  are  clear  enough.  Costa  Rica's 
credit  has  been  injured;  her  Government  has  been  discredited,  and 
her  very  institutions  threatened  with  the  same  kind  of  attacks  that 


106 

Mexico  has  endured  during  the  last  eight  years.  During  the  fall  of 
1918  a  number  of  American  newspapers  published  a  series  of  sensa- 
tional articles  which  purported  to  be  a  revelation  of  President  Wil- 
son's motives  in  refusing  diplomatic  relations  with  Costa  Rica.  These 
publications,  at  that  time,  claimed  that  a  group  of  American  citizens 
led  by  Mr.  Lincoln  G.  Valentine  of  New  York,  inspired  and  financed 
the  overthrow  of  the  Gonzalez  Government  and  placed  Tinoco  in  the 
presidency,  in  order  to  secure  from  the  new  Government  certain  oil 
concessions. 

Subsequent  to  this  publication,  I  am  relia\)ly  informed,  a  sub- 
committee of  the  Foreign  Relations  Committee  of  the  Senate  inquired 
into  the  refusal  of  this  Government  to  accord  recognition  to  the  ex- 
isting government  of  Costa  Rica,  headed  by  President  Tinoco.  That 
sub-committee,  of  course,  had  before  it  not  only  such  information 
and  such  allegations  as  the  newspapers  had  published,  but  additional 
facts,  obtained,  I  presume,  from  the  State  Department  and  other 
sources. 

With  this  information  before  it,  Mr.  Speaker,  the  sub-committee 
reported,  in  effect,  that  it  could  find  no  good  and  sufficient  reason 
for  the  continued  refusal  to  recognize  the  Government  headed  by 
President  Tinoco.  In  view  of  international  conditions  then  existing, 
however,  the  sub-committee  did  not  recommend  mandatory  action  on 
the  part  of  the  Senate,  although,  I  am  informed,  several  members 
of  the  sub-committee  unofficially  communicated  these  facts  to  the 
State  Department  and  urged  President  Tinoco's  recognition. 

Gonzalez,  the  deposed  President  of  Costa  Rica,  immediately 
after  the  bloodless  coup  d'etat  two  years  ago,  had  left  Costa  Rica 
and  had  come  to  the  United  States.  Since  that  time,  I  am  informed, 
he  and  his  friends  have  persistently  maintained  an  intrigue  of  pub- 
licity against  President  Tinoco  and  against  American  interests  in 
Costa  Rica.  If  statements  I  have  received  are  true,  this  intrigue 
has  reached  into  some  of  the  executive  departments  of  this  Govern- 
ment. 

I  wish  to  lay  before  the  House  at  this  time  some  of  these  allega- 
tions, which  have  come  to  me  unsolicited  and  which  I  feel  strongly 
should  be  investigated  by  the  Foreign  Affairs  Committee.  They 
include  these : 

1.  That  the  newspaper  articles  published  last  fall  included  what 
was  alleged  to  be  confidential  correspondence  between  Mr.  Lincoln  G. 
Valentine  and  other  American  citizens. 

2.  That,  according  to  these  publications,  this  confidential  cor- 
respondence— involving  American  citizens  of  integrity  and  good 
standing — was  obtained  from  the  safes  of  the  parties  named  through 


107 

the    assistance    of — I    quote    the    publications — "  officials    of    the 
United  States  Government." 

3.  That  this  assistance  was  alleged  to  have  come  through  a  man 
who  purported  to  be  an  agent  of  the  Department  of  Justice. 

4.  That  this  alleged  agent  of  the  Department  of  Justice  de- 
livered these  pilfered  papers  to  Gonzalez  to  be  used  in  the  further- 
ance of  the  latter's  publicity  intrigues  against  American  citizens 
and  their  interests  in  Costa  Rica. 

5.  That  9ne  of  the  first  acts  of  Gonzalez  after  assuming  the 
Presidency  of  Costa  Rica  in  1914 — shortly  after  the  outbreak  of  the 
European  war — was  to  be  found,  in  collaboration  with  a  notorious 
German  propagandist,  a  newspaper  devoted  to  pro-German  pub- 
licity. 

Mr.  Speaker' — I  am  loath  to  believe  these  allegations ;  I  am  loath 
to  believe  that  the — shall  I  say  "  foreign  office  "  of  the  United  States 
Government? — is  engaged  in  safe-cracking  work  against  its  own  citi- 
zens in  behalf  of  foreign  political  exiles  or  that  it  is  conniving  at 
a  publicity  intrigue  which  may  have  for  its  object  the  wrecking  of 
an  important  phase  of  our  foreign  commerce. 

And  I  am  loath  to  permit  such  statements  and  allegations  to  go 
unchallenged  by  this  Congress. 

But,  Mr.  Speaker,  I  am  more  loath  to  accept  the  responsibility 
as  a  Member  of  the  American  Congress  for  the  continuation  without 
my  protest  of  such  practices  if  they  do  exist. 

I  want  this  House  and  this  Congress  to  have  the  facts.  I  want 
to  see  the  unpublished  portions  of  that  stolen  correspondence.  I 
want  to  know  if,  as  has  been  alleged,  Gonzalez,  during  his  tenure  as 
President  of  Costa  Rica,  persistently  and  systematically  persecuted 
foreign  interests  that  had  invested  in  Costa  Rican  properties  on  his 
solicitation.  I  want  to  know  if,  as  has  been  alleged,  this  Gonzalez 
in  his  persecution  of  American  interests,  advised  with  and  was  advised 
by  that  same  German  propaganda  service  of  whose  insidious  and  dia- 
bolical workings  in  Mexico  we  learned  through  the  publication  of 
the  Zimmerman  note  two  years  ago.  I  want  to  know  if,  in  Costa 
Rica  as  in  Mexico,  such  anti-American  political  leaders  have  been 
used  as  the  cat's-paws  of  the  pirates  of  Wilhelmstrasse. 

It  took  the  American  people  a  good  many  years  to  reahze,  Mr. 
Speaker,  that  crimes  were  being  committed  in  Mexico  under  the  guise 
of  "  revolution  " ;  it  took  them  a  good  many  years  to  realize  that  the 
German  Government  had  reached  into  the  very  vitals  of  that  countr>' 
with  its  baneful  influences,  and  when  the  story  was  told  officially 
through  the  publication  of  the  Zimmerman  correspondence  this  coun- 
try stood  aghast. 


108 

I  believe  the  time  has  come  to  show  the  hidden  hand  of  intrigue 
among  our  Latin  American  neighbors  and  to  serve  notice  on  all 
agents  of  Germany  that  this  Government  will  no  longer  allow  them 
to  hound  Americans,  even  though  their  activities  are  shrouded  in  the 
mystery  of  Latin  American  policies. 

Mr.  Speaker,  I  believe  the  time  has  come  again,  and  I  thank 
God  for  it,  when  Members  of  the  American  Congress  may  ask  ques- 
tions of  the  State  Department  without  inviting  reflections  upon  their 
loyalty,  public  spirit,  or  patriotism.  • 


4>» 


109 


APPENDIX  II. 

From  the  Testimony  of  the  Assistant  Editor  of  "  El  Imparcial/' 
German  Propaganda  Paper  Founded  by  Gonzalez  and  His  Hun 
Coterie. 

"  When  in  May,  1916,  some  friction  arose  between  the  Mexican  Gov- 
ernment and  that  of  the  United  States,  Alfredo  Gonzalez  telephoned  from 
the  Presidential  Hous^  ordering  the  editor  of  the  daily  "  El  Imparcial "  to 
back  directly  the  attitude  of  Carranza  by  offering  its  columns  to  Mr.  Manero 
(commission  agent  of  that  Government)  for  any  publications  that  he  might 
wish  to  make  in  favor  of  Mexico.  These  were  made  in  almost  every 
edition. 

"  There  was  sent  from  the  Presidential  House  to  the  editing  rooms  of 
the  paper,  in  a  closed  envelope,  an  editorial  article  containing  the  following 
paragraphs : 

"  '  The  note  of  Venustiano  Carranza  to  the  Government  of  the 
United  States  is  one  of  the  highest  examples  of  national  dignity. 
This  is  the  moment  for  Mexico  to  sever  the  American  power  at  its 
root,  as  the  Yankee  eagle  is  flying  from  one  Latin  Republic  to  the 
other  just  as  in  olden  times  the  Napoleonic  eagles  were  flying  from 
tower  to  tower. 

"  '*  *  *  that  it  is  proven  that  President  Wilson,  who  is  call- 
ing himself  democratic  and  the  protector  of  the  Latin  American 
countries  personifies  today  the  harshness,  the  arrogance,  the  fatuity 
and  the  impudence  of  vulgar  Yankees.'  " 


M.  B.  Brown  Printing  &  Binding  Co. 
New  York. 


■    -mm 


